The benefits of expanding your business abroad
All entrepreneurs dream of expanding their business on a global scale and establishing themselves in foreign markets, but not all businesses succeed in doing so. International business is not as simple as expanding your domestic operation and there are many other details that need to be considered during your execution. However, the benefits of expanding your business abroad are widespread, and, if done correctly, the potential to turn a profit is especially attractive.
One of the reasons why businesses decide to expand overseas is because they have the opportunity to enter new markets. Untapped markets allow for the possibility of increased revenue; however, they also increase the diversification of your profits. If your business is successfully established in American, European, and Asian markets, you will be generating more profits whilst seemingly decreasing your dependence on a single market. You can build better customer bases, take advantage of open borders, and capitalize on any trade incentives offered in those regions. If your product is seasonal, expanding into international markets is a great way to mitigate risks and keep the business running all year round.
Another benefit of expanding your business abroad is that you can access a new pool of skilled workers. You may find that specialized talent is harder to find in some countries than in others. If you are finding it difficult to rally a skilled team of workers in your home country, do your research about where those trained individuals are located, and consider expanding to those specific territories. When you are considering international expansion, you don’t have to start a business from the ground up. You can also offer a relocation package to existing staff as this will help the overall transition run smoothly. If you are thinking of transferring any of your existing employees, don’t forget to offer them global insurance. Keep in mind that a hardworking and reliable team of staff is the foundation of any successful business.
Some entrepreneurs decide to expand internationally in order to reduce significant costs that are associated with the business. Certain countries, like Malaysia or India, have lower costs in terms of labor and materials. Therefore, many businesses choose to open up their manufacturing and warehouse operations in foreign countries. If the cost of producing goods is notably lowered, this allows companies to invest more money into other aspects of the business, such as marketing or product development. If you have the resources to expand internationally you can take advantage of these lowered costs and fine-tune the utilization of your resources. However, you must also factor in the different tax and employment policies that each country holds before deciding to expand abroad.
If you have a product or service that is unique to your country, you may be able to profit extensively by expanding this into new markets. You may find that your business addresses an important gap in the market in a foreign country. If you are the first to introduce a proven concept, you can stay ahead of the competition and get a head start before any local competitors do the same. For example, Cat Cafes were highly popular in countries like Japan and Taiwan for many years before they made the crossover to Western markets. A Cat Cafe is like any normal coffee shop, except that its main attraction is that you watch, cuddle, and play with cats in exchange for an hourly cover fee. The first Cat Cafe was opened in Taiwan in 1998, the concept was introduced to Japan in 2005, and in 2014 the first of its kind opened in the United States. Now, Cat Cafes can be found in many different cities across the world.
Nevertheless, there are also many issues that can be encountered whilst conducting an international expansion. When you launch a business abroad you must consider the new requirements that accompany foreign markets. You cannot expect the same business model to work all across the world. Nor can you assume that foreign markets will be familiar or open to the products and services you are offering. Conducting extensive target market research is one of the most useful things you can do before you consider expansion. This way you can rest assured that there is a demand for your products overseas.
Global ambition is not enough to ensure that your business will flourish abroad. Overall, there are many benefits that come with expanding your business overseas. However, with increased growth comes added costs and responsibilities, so make sure that you plan meticulously before deciding to go ahead with it. Despite the potential drawbacks of expanding your business, the possibility of entering new markets, reducing labour or manufacturing costs, identifying new gaps in foreign markets, and tapping into skilled workforces entices many entrepreneurs to go global.
