If you are considering taking your small business international, these contributor tips will help.
Important Factors That Will Impact International Expansion Efforts
Preparing to scale your business to offer your services or deliver products internationally is a testament to your business’s potential for growth and expansion. It’s an exciting opportunity to tap into a new market for your company. However, it’s important to remember that success in your primary country of operation doesn’t guarantee automatic success in a new country.
Let’s take a look at some important considerations prior to offering international shipping and services.
Demand
First, you need to ascertain if there is a demand. You can do this via extensive market research, identifying who your competitors would be and what sales look like for what you do. Different countries have different needs and customs you should be aware of that can impact your visibility in a new market.
Registrations and Compliance
You don’t need to be registered in all countries you are exporting to, but it’s important that you understand if you need to be tax registered, for example, or if you need to meet certain regulations to be able to sell your products. It is important you take the time to understand the implications for your business to ensure you are trading legally and you aren’t letting people down by them not being able to receive products or purchasing illegal services due to your non-compliance or naivety.
Shipping
Shipping will be different from country to country, and each one will have rules and regulations in relation to VAT and tax that can impact your ability to ship to that country and what you can charge. For example, shipping to the EU can be complex for small businesses, especially since the changes in VAT rules can increase costs to the customer. While options like DDP – delivery duty paid can reduce the cost to the consumer as the business absorbs it, in some countries, deliveries made this way can be refused. So, it’s important to know what your legal obligations are both in your resident country and the countries you will be shipping to.
Market Entry Strategy
Every business expanding internationally needs a well-thought-out market entry strategy. This strategy details how you will introduce your solution to the market and what activities you will undertake to ensure success. Whether it’s through franchising, setting up a subsidiary, forming partnerships, or direct sales, having a clear strategy will help you navigate the complexities of international expansion.
Cultural Understanding
Understanding cultural differences is crucial. It’s not just about being aware of what is and is not acceptable for the offerings you will have available. It’s also about respecting and understanding the social and cultural norms of the countries you will be operating in. It’s employee culture, workplace ethics, legal obligations pertaining to employees, trading hours, restrictions on activities, and so much more. Neglecting to do so can lead to unintended offence or even legal issues.
International expansion can be an amazing way to promote your business to new heights, but if you approach it carefully, it can also spell disaster for you, too.