In August 2021, YouGov PLC reported a survey by Hitachi Capital UK that revealed 43% of small businesses in the UK were hoping to expand into international markets, as the UK’s travel green list expanded, allowing further international travel. The sudden demand for international trading is understandable, particularly after such a difficult year for the economy.
There are many benefits to expanding your business globally. It can protect you from declining domestic markets and most importantly, significantly increase your potential for your business to grow, resulting in higher revenue and often better investment opportunities. However, international expansion isn’t without its drawbacks. From a country’s culture and government to different legal requirements and local laws, there are a number of factors to consider before you can take your business global.
Here, we explore what you need to know before taking the plunge.
Benefits Of Going Global
Expanding your business overseas will give you access to a new audience and offer new revenue potential which could increase sales and overall income for your business. You will also have a better chance of attracting international investors which could provide you with opportunities you would not have access to if you keep all of your business operations inside the UK.
Taking your business international will also give you access to a wider group of talent, meaning you can easily hire staff who are familiar with the local language and culture of each of the countries you’ve expanded into.
Here are a number of important factors to consider before expanding.
The Culture Of The Country
It’s essential to consider the culture of each of the countries you’re planning to expand to and determine whether your business and products or services align with these. You may find what your business offers isn’t beneficial to the local markets, which would likely have a negative impact on your return on investment.
Legal Responsibilities And Local Laws
If you choose to move into foreign markets, it’s important to ensure your company can work within the laws and regulations of the countries you’re trading in. Legal commitments can be complex and difficult to navigate, so consult a legal specialist to ensure your business is operating correctly for each individual market. Not only will this save time fixing costly mistakes during the expansion process, but it will also ensure you stay on the right side of the law.
Government Stability
Before launching your business in a new country, it’s crucial to ensure the government and its authority in the area is stable, as this is vital to contract integrity, employee security and rights and trademark/intellectual property, among other aspects of your business’ operations. Seek out an international law firm to assess factors such as currency exchange rates, government support for businesses, protection policies and immigration laws, before making any plans for an international expansion.
