5 Questions to Ask Before Taking Your Business Overseas
You’ve noticed that revenue has been steadily growing, particularly due to more demand or customers from international markets. To further tap on these potentially lucrative markets, the idea for international expansion crosses your mind, judging as many have made the precarious foray and were rewarded by the benefits of diversification.
Take Uber for instance, an apt example of a startup that has since achieved global expansion. Today, the transportation behemoth operates in more than 80 countries and hundreds of cities. It did so by first breaking into strategic domestic markets, and slowly but steadily making its way across regions. But exactly how ready are you to move beyond your home turf, a process that is both complex and dynamic? Feel free to ponder over these guiding questions before you decide to make the leap.
1. How concerned should I be about paperwork?
Red tape is inevitable if you’re trying to break into a new market. However, in certain countries and/or industries, bureaucracy lends many challenges, particularly if you are in the medical or technology industries, where the numerous intellectual property regulations and safety sanctions are stringent. Carefully review the relevant regulations and rules to ascertain if compliance and certificates are needed, and reach out to the relevant authorities should you feel that more clarification is required.
2. How will I navigate around cultural implications?
Understanding a country’s people, be it their preferences, habits, needs, or wants is important for your success. In certain countries where the primary language is not one familiar to yourself, the ability to communicate effectively may make or break your burgeoning business venture. Do your homework before deciding on a country, and research on their culture and way of doing business before committing. For example, in heavily patriarchal Saudi Arabia, a woman is largely expected to be accompanied by a male in many places, and your female employees may find their personal and professional freedom severely limited.
3. Is an international partner necessary?
The above two questions lead to this pertinent one. Consider making space in your budget for an international partner, which may relieve you of several headaches in advance and mitigate the inherent risk in expanding overseas. Shield GEO’s services, for instance, allow you to readily access a team of in-country experts and highly experienced consultants who are ready to hit the ground running, and can easily help you resolve red tape challenges, and be the middleman between your business and the parties you need to liaise with, if necessary.
4. Should I be concerned about the manpower required for international expansion?
Sending employees overseas on assignment is always a risk to the startup, especially if resources are likely to be lean and the assigned employees are required to be of senior rank. Not only is it necessary to evaluate the right man or woman for the job, but the expenditure and effort needed for international expansion (arranging for visas, costs required for any dependents) are not to be taken lightly. An employer of record can handle administrative matters, such as immigration, taxes and payroll. They can also recruit suitable local talent for additional hiring on your behalf, eliminating the workload from your women and men on the ground. Your startup will also be protected from any unfortunate legal implications.
5. Which markets are hardest to break into?
Major factors include bureaucracy, political and economic climate of the country. According to the World Bank’s annual country economy ranking for doing business, some countries are harder to incorporate in. For example, incorporating in India takes up to a month, compared to more rapid processing in Canada or Australia, which takes five and 2.5 days respectively. Some markets like Malaysia also practise protection for specific industries, and taxation for foreign companies in those industries (in Malaysia’s case, automotive) may be high. If you can’t afford the time, or if you feel that incorporating in a country is too much of a risk, there are ways to test out the market for international expansion without having to officially register the company. Working with an employer of record allows you to fully focus on testing your product or service in your country of choice, without the burden of incorporating the company.
Shield GEO makes international employment simple. Our customers use Shield GEO to employ and payroll hundreds of workers in over fifty countries. Find out more.