Planning to expand your business abroad? Expanding business abroad can be stressful and chaotic, but this is not a reason to choose from taking the business international. In the world of business global expansion is becoming a vital piece of an organization’s growth strategy. Here are the top 5 compiled tips for global expansion strategies.
Before entering a new place, it is good for the future of the business to study the market. Market research is probably one of the most important aspect that should be considered as it can change the fate of the businesses.
In market research the investors should take a deep overlook on the following key aspects in the foreign country;
- Consumer buying habits
- Culture differences
- Existing competitors
- Rules of starting the business
A market research allows the business to understand all the above aspects and evaluate whether it is beneficial for the business to invest in the foreign country or not.
The business structure influences everything from day-to-day operations, to taxes, to how much of your personal assets are at risk etc. A company should choose a business structure that gives the right balance of benefits and legal protections.
The common business structures that can be chosen are;
- Sole traders
- Limited liability companies
- S corporation
|Sole trader||One person||Personal tax||Unlimited liability|
|Partnership||Two or more person (max:20)||Personal tax||Unlimited liability|
|Limited liability companies||One or more||Personal tax or corporate tax||Limited liability|
|Corporation||One or more people||corporate tax||Limited liability|
|S Corporation (only for U.S. citizens)||One or more people, but no more than 100||Personal tax||Limited liability|
The above table summarizes general traits of business structures, however, ownership rules, taxes and liability for each business structure can vary by state in which the business is being operated.
Local business Partner
Investing abroad requires the business owner to deal with many aspects associated with human resources, taxation, legal identity, relations with public offices which can create problems for the businesses to look after many aspects in a new place. For example, in a country like Korea aspects related to human resource, recruitment and selection, and payroll are not clear to the foreign investors. The reason for this is the language barrier and the constant changes in regulations that can challenge business operations and development. Therefore, in case like these, it is more suitable to use a Korean HR service that can handle such aspects to support the new business.
Clear Strategic Plan
Another one of the major aspects of expanding successfully in a foreign country is to come up with a clear and focused strategic plan. With an unclear plan the business will decline even before it has started. A well-defined strategic plan allows the business to have a clear vision of what the business objectives are in the short term and long term. The plan should include:
- Sales and sales delivery strategies
- Marketing strategy
- Marketing programs
Having clear aims and strategies is the best way to enter successfully enter a foreign market.
As world has just emerged from COVID crisis, so coming through the crisis stronger than before should be the strategic priority. We believe that there are some overriding strategic priorities that will help you emerge from the crisis stronger than before i.e. realign cost structure, aim towards digital enterprise and prepare the workforce for new world order.PWC Global
An expansion to foreign country will also require a business to expand its team. The best way to expand is by recruiting local staff because local staff can help the business to manage the expansion more effectively, as the team knows the local market, local language and can manage customer relationships in a better way.