Some business owners who have already achieved visible success in the local market begin to consider the possibility of scaling up. One of the best solutions is to expand your business by opening one or more branches abroad. Today, there are many striking examples of how small companies are transforming into giants thanks to international growth. But… this complex process requires certain knowledge and the right approach.
There are a number of questions to consider before investing your own money in a new project in another country. For example, you should think about who your target audience is, what international online payment methods you will use, and what strategy to choose for the new market. In this article, we have compiled the basic steps necessary to expand any business to the international level!
Step 1. Decide on the Country Where You Want to Open a Branch
The selection of the appropriate country is a strategic choice that will directly influence the cost, rate of growth, and sustainability in the long run. So, you should begin by evaluating the market demand for your product or service, the intensity of competition, and the purchasing power of customers. Look at the compatibility of cultures, language differences, and the maturity of the local industry. A big market may not be the best or the focused market with definite unmet needs.
The next step is to consider macro factors like stability in the political system, doing business, taxes, and trade agreements. Take into account logistics, time zone, and distance to suppliers or partners. It is aimed at picking a country where there is a market opportunity and your capabilities of operations and risk-taking fit, not where expansion can be tempting.
Step 2. Conduct In-Depth Marketing Research
Now you have clearly defined in which country you would like to expand your business and why. What’s next? You need to make sure that this decision will be economically beneficial for the company, so take a look at the main types of marketing research. This knowledge will help you conduct a detailed analysis and determine some key points:
- Understanding your target audience and their preferences.
- Identifying the strengths and weaknesses of the main competitors in your chosen niche.
- Assessing the local market and the amount of investment required.
- Knowing the potential market share you can capture.
You shouldn’t underestimate or ignore this step! Why is that so? All of the abovementioned things will help you build the right strategy (which may differ significantly from the one you have now) and test some hypotheses. A good business always starts with a lot of research on the market, competitors, and target audience.
Step 3. Learn About Local Legal Requirements
Knowing how businesses are registered, regulated, and monitored before venturing into a new country is key to a clear understanding. Legal frameworks, licensing regulations, reporting and requirements, and compliance can vary considerably. Let’s take a look at a real example! In the case of the United Kingdom, the registration of companies and the filing of corporate activities are handled by Companies House, a government agency that regulates business transparency and statutory reporting.
In addition to registration, check on employment laws, data protection regulations, and any other regulations in the industry. Errors at this point may result in penalties, interruptions, or even closure. Liaising with local legal advisors can be useful in making sure that they comply immediately and avoid making things very expensive to rearrange in the future.
Step 4. Think About Financial Transactions
Obviously, no business can run smoothly without a properly set up payment system. We suggest figuring out methods for international payments ahead of time, which will let you get money into your main bank accounts that are abroad. For this, most entrepreneurs just reach out to the right specialists, like Tranzzo and other companies that offer turnkey services. Developing a custom and new system for a new branch is expensive and inefficient.
What else? Determine how you will finance the new branch. Either the parent company capital, local, or reinvested revenue? Evaluate the currency risks, the exchange rates, and the repatriation of profits. It may be that the financial structuring is poor, and thus it silently takes over the margins during times of high sales. Early establishment of compliant banking, accounting, and tax processes should also be instituted. Know local rates of taxes, VAT (Value Added Tax) or sales tax regulations and transfer pricing.
Step 5. Assemble a Local Team and Launch Your Business
The last step is about the native staff. Effective market entry requires a powerful local team. So, employ local knowledgeable people who are aware of local customers, regulations, and business culture. Some of the critical initial positions are a country manager, sales lead, and operations or compliance specialist. Local experience lowers the expensive errors and speeds up the mistrust among partners and customers.
When the team is assembled, then concentrate on implementation. Localize your product, prices, and message instead of imitating the home market strategy. Start with simple KPIs, brief feedback, and attainable milestones.
Expanding internationally is not a one-time occurrence. It is a process that requires some discipline, local ownership, and constant optimization. However, it is not necessary to completely abandon old employees. For example, staff with vast experience can become managers of a new branch in another country.
Final Thoughts
Perhaps every modern entrepreneur would like to scale their business to the international market, covering more and more countries and target audiences. However, in practice, it is not as easy as it may seem at first glance. To achieve this goal, you need to think through your strategy in advance, down to the smallest detail.
What else? Consider international online payment assistance in advance, before your new branch opens its doors in a new country. Experts from Tranzzo provide quick and hassle-free support, so you don’t have to worry about it. Other tips include studying local regulations and laws, as well as conducting detailed marketing research.
We hope our article will help you successfully expand your business into the international market as soon as possible!
