As a business starts to consider international expansion, what are some of the key questions and issues management should be addressing first? Here’s a quick list to get you started. Ideally, these questions should lead to MORE questions…Again, this is only the beginning.
- What do you intend to sell overseas? Where do you intend to sell overseas? Is there a market for your product in the countries you are considering?
- What will your price points be? What are the additional expenses you will incur? What costs will you save? How much do you need to charge to break-even?
- Analyze product/service categories and segments. Be prepared to adapt based on the locality.
- What barriers to entry exist?
- How will you get you profits back?
- While building a global strategy, be sure to consider global tax and legal issue during the planning process.
- Who will run your overseas operations? Will you have local employees? (assess the labor and payroll laws, costs and taxes) Will you send home county employees abroad? (assess the VISA requirements and timing, as well as the cost of moving and compensating that employee)
- Line up local business experts and professionals to help you set up your operations, but understand ALL costs up front.
- Understand capitalization requirements and operational funding needs.
- Know both home country and host country reporting and compliance requirements.
- Plan for and around risk: business risk, currency risk, insurable risks.
- Patience. . . don’t forget plenty of patience.
International expansion can be both incredibly time (and money) consuming and challenging. But it can also be incredibly rewarding and lucrative. If it’s worth doing, it’s even more worth doing correctly and well. Seek advice early and often – and when you’re ready, book that trip and make sure your passport hasn’t expired!