Globalization has been for years the single most significant growth goal for fresh, up-and-coming firms, and the last years an ocean of small to medium sized companies have flooded the global market
, and a considerable percentage of them are doing pretty well.
Still, expanding abroad is a tricky deal, especially when it comes to deciding the time to go overseas. It is essential to weigh all possible risks and benefits of going international before actually doing it, including the overall cost of adapting against the pull of the market.
Overseas expansion pertains a lot to geography: with more than 200 different states all around the globe, firms have many cases to consider, each with its distinctive opportunities, oddities, dangers, and possible benefits. This means that your company will have to develop a fully custom-made market strategy, as well as an operating model tailored to the financial and social reality of the markets you are interested in.
These 4 steps will prove of great value in your effort to discover the right markets for your expansion, evaluate the possible risks and eventually expand abroad.
1.First Identify the Market, Then Set your Goals
It can prove rather difficult to determine the most promising market for your expansion because options are so many. Hence, it is vital to find your focus first and then devote all your energy to setting your goals. Consult with your team and prioritize your goals, by identifying assessable performance indicators, which can be monitored by local managers and the head office.
Lacking clear-cut incentives and goals makes it virtually impossible to evaluate the potential risks accurately and determine whether expansion is indeed feasible to your firm.
2.Lay Emphasis on Research
You will have to do much research on the country’s commercial and cultural background. Gather as much reliable information as one can find and study it carefully, check current trends and consult with businessmen that have already expanded to the region, asking for advice and guidance.
Monitor the currency exchange rate and ascertain the government’s stability. Keep a sharp eye out for negative signs, such as devaluations and inflation issues, and be cautious of any political restrictions forbidding the transfer of revenues or funds beyond country borders to foreign firms. Watch out for embargoes, trade sanctions, export controls and similar regulations that could severely impact your business.
Generally speaking, it would be wise to postpone any plans of expanding in times of political unrest, elections or plebiscites.
3.Get Ready for Some Serious Changes
Expanding abroad will demand all sorts of changes to most sectors of your firm’s organization, operation, and management. And these changes will not happen automatically – you have to make them.
First, you need to identify the areas that need to adjust. Then isolate each aspect of your domestic model and check whether it will prove efficient in an international commercial context. For instance, most probably your current supply chain model will not be able to meet an international demand: your products will have to be transferred to way greater distances and possibly under more difficult conditions. Obviously, globalization will make things far more complicated, and the more prepared you are to face these new challenges, the better.
4.Avoid Rush Action
Once you have made your homework and you are done with all preparations and adaptations, you need to conduct calculated market tests. These tests will serve as a foothold and will help you see how you can ameliorate your presence to the local market. Hence, start small and check how things go.
By monitoring every single sale, all your expenses and taking your customers’ feedback very seriously, you will be able to compare your results to those of other firms in your industry that have expanded abroad and incessantly improve your products or services.
Conclusion
Expanding your business abroad always has an inherent risk, but nowadays failing to do so is often the prelude of a firm’s demise. Your competitors will probably not have similar hesitations, and once their overseas footholds strengthen, they will dwarf your presence in the market.
Furthermore, the world’s leading business minds know very well that impediments and failures are often the first steps to success. If you wish to avoid most of them while understanding what it takes to go international, ask for help from experts on the field. PHS will be happy to offer you its services and assist you every step of the way..
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If you want to work with professionals who provide exceptional quality standards of services in Cyprus, the simplest way is to fill in the contact form below.
We will take you through a step by step process from A to Z in creating the perfect business structure in Cyprus.
Can’t wait any longer? Become even more successful by working with accountants you can count on and be among the thousands business that already did.