Every business wants to grow sales and profit year after year, and aspire to be the next Amazon. Businesses can grow by either expanding the number of products or by acquiring new customers. At some point, you have to start looking for new customers outside your current geographic reach. The good news is that the arrival of Internet has made it easier to reach to the customers on the other side of the country or even outside the country. Selling to international customers can help you expand your business significantly with less effort. However, it does not come without its own challenges. Below we outline some of the challenges you need to watch out for when expanding your business internationally.
- International Laws – One of the most important challenges you need to face is understanding and complying with international laws and regulations. Every country has its own laws of doing business. They could cover many aspects such as labor, manufacturing, accounting, etc. Failure to understand these laws and ensuring that you don’t run afoul can get you in the hot water quickly. It is very likely that you will have to face litigations while operating in another country. Make sure you have access to high-stake arbitration experts to deal with these litigations. They have knowhow and expertise to help you.
- Culture – Different countries have their own culture and customs. This could include how you greet people, how you behave in the meetings, what gifts you can give, and so on. When you expand your business to the country that is not similar to the one you operate in it is critical that you pay attention to cultural differences, and ensure that you don’t cross cultural boundaries. Many businesses have run into problems when they failed to pay attention to the cultural differences.
- Language – Similar to cultural differences, language is another barrier that businesses have to overcome when expanding globally. While English is accepted in many places, when you are dealing with local people not everyone may be familiar or fluent in English. You have to learn, at least, the basics of the language of the country you want operate in or hire local people who are fluent in that language.
- Competition – While competition is everywhere no matter where you conduct your business, it is even more challenging to deal with the competition in a foreign country. The local competitors may already be entrenched and familiar with the local laws, culture, customers, etc. You will have difficult time competing with them unless you have prepared yourself well and have resources to deal with these challenges.
- Finance and Accounting – Financial and accounting rules vary widely in different countries. If you need to borrow money for expansion, the banks may not be willing to work with a company that is not based on that country. Similarly, accounting rules may also vary from country to country. Again, hiring local accounting firms can help you navigate these rules.
As you can see, expanding your business globally comes with great opportunity, and complex challenges. Make sure you have studied well, and are prepared to deal with the known and unknown challenges before jumping in.
