Is your company ready to jump into the global market?
Going global doesn’t just mean more customers. It also means new business opportunities and new success. Your business may be successful already, but it’s best not to jump in blind.
Global expansion is a huge business milestone, so there’s no room for error when strategizing. Want to know how you can create a successful global expansion plan? Read on to find out more.
Have a Comprehensive Set of Goals
Before any new venture, you must always have a defined set of goals. All other aspects of expanding your business will come from having a solid plan. You need to consider what you want your global expansion to accomplish.
Everyone always looks at the big picture of profits and making your company stronger. Think about how you want to go about this. If you set a clear plan with proper goals, your expansion will go more smoothly.
You should have short-term, medium-term, and long-term goals for your expansion project.
Ask yourself, why am I expanding? Some want easier access to natural resources or materials. Others want to take advantage of a talented local employee pool to strengthen existing staff.
A common reason is expanding into new markets that you hope will be hungry for your product or service. However, the most important thing to remember is not to expand only because you can.
Your expansion should be for a reason in service of a larger business plan. You expand because you can make more money, save more money, or grow your capabilities or brand awareness. Having a concrete plan for your expansion is also a great way to manage your progress.
For example, you could be trying to lower the production costs of some of your components. You expand abroad because the factory space, workforce, and raw materials are cheaper. Your plan should keep track of these costs and compare them with previous figures.
A comprehensive plan would also consider the initial costs involved in the move. Getting things up and running could be expensive. Presumably, you’ll also have to pay for the transportation of materials and products.
Having a multi-staged plan lets you figure out if the expansion is worth it – if it makes sense on paper and in practice.
Don’t Dive in Without Research
One of the worst things you could do is dive in without proper research. Every global expansion strategy should consider its options before moving forward. If you choose a country or city to expand to, you want to ensure it’s the right one.
If you follow the first part of this guide, you’ll already have a comprehensive set of goals. You’ll know what you’re looking for out of your expansion. Next, you need to research which location will give you what you need and want.
One country might have cheaper labor but stricter tax laws for foreign entities. You might find a great distribution center, but the market for your product there might be weaker. If you’re trying to enter a market to compete directly, you should know what you’re up against.
Are there well-established alternatives already in the area? If so, you’ll need to consider how you can beat them. A different country might be easier to dominate, but it might also be smaller overall.
Whether you end up as a big fish in a small pond or drowning in a sea of competition will depend on market research. The happy medium is taking enough of the market share in a large market to justify the expansion. You won’t even know where to start with adapting without proper research.
Get Up to Speed with Labor Laws and Taxation
Expanding globally means workers and boots on the ground. Someone needs to cover the offices, factories, distribution centers, and stores you open. Your expansion plan should never forget to consider local labor laws and taxation.
Ignorance won’t save you from running afoul of the law in your new location. If you aren’t careful, you could face severe fines or end up dealing with worker strikes. You want to avoid any and all disruption to your expansion and overall business.
This is where PEO services can come in handy. PEO stands for Professional Employer Organization. These services do all the nitty-gritty of making sure your labor and tax practices obey the law of the land. The country you are expanding to is likely to have a few to choose from.
They’ll save you the headache by doing all the paperwork for you. Payroll, tax forms, HR, and basic safety regulations are only a few things they help manage. You don’t want to skip anything important, but often time is of the essence.
With a competent PEO service, you can be up and running within days of your expansion. You won’t even have to worry about regulatory compliance because they’d make sure to cross the T’s and dot the I’s.
Hire Local, Offer Remote Work With Good Incentives
When you expand globally, there are many labor and staff-related advantages. You get access to a huge array of local talent, which could be cheaper and more efficient. Hiring them might be to your advantage.
That said, you have your own talented staff as well. Your expansion strategy should find ways to leverage what you have. Consider offering remote work options or good incentives for relocating.
If your expansion could benefit from your own people on the ground, make it worthwhile for both. If the work you’re putting out is remote compatible, make accommodations for that. The key is smooth expansion with minimal downtime.
How to Create a Global Expansion Strategy
There’s a lot to consider when creating a global expansion strategy. You need a comprehensive plan, and you need to do your research. There are various laws and regulations you need to be aware of as well.
Finally, remember to utilize the staff you already have the best you can. Check out our other blog posts to learn more about expanding your business and other great tips.