Planning your International Expansion

Our population has become increasingly mobile and globalised. Internet access is ubiquitous, with most people carrying around mini-computers in their pockets. There are predictions that by 2020, emerging international markets will be the new global leaders, particularly Brazil, Russia, India, and China. The opportunity to communicate and trade with people around the world has never been so palpable.

Companies expanding internationally stand to benefit in multiple ways.


  • They reduce their dependence on the domestic markets they have developed locally

  • Fluctuations in the local market can be offset by targeting international markets with different or opposite fluctuations, particularly if the locations are located in different hemispheres and thus experience different seasons.

  • They may benefit from various tax programs in other countries that complement its business

  • They have the chance to become a player in the global trade and stand to gain formidable knowledge and experience in expanding its business empire. If you are an entrepreneur with aspirations of your business going international, here are a few things to keep in mind if you want to expand your business internationally.


How to expand your business internationally – Do your homework


You need to decide if the risk of investing overseas is worth the potential gain. The fact your product is successful domestically has no bearing on its prospects abroad. Perform a market analysis and gap analysis to see if there is a demand for your product in the target growth area. Given the costs of globalisation, your product might be costlier as compared to domestic businesses – determine how and if this will affect your profit margins.

Find out if your customer base has any differences based on language and culture, and determine how you will account for cultural differences. Some major brands learned this the hard way. For example, Nokia revealed their Lumia line of cell phones in 2011, only to later found out that Lumia actually means prostitute in Spanish. Avoid potential embarrassment by spending time in the target market.

You might consider hiring an Export Management Company to do the research for you. They handle all the export details and market research, but will likely charge a commission on the final sale price by the buyer abroad. Your government might also have multiple resources free of charge for you to use. Most governments want entrepreneurs to export goods, as it is good for trade deficits and the GDP. Do not be afraid to research opportunities within your own borders to expand outside of them.

Companies expanding internationally always need a plan


Yes – this means a business plan, just like the one you established at the formation of your parent business. You must develop a localised business strategy that takes into account the different economic, cultural and government conditions in your target market. Define short-, medium- and long-term goals. Establish metrics to measure your success over time. Analyse which business structure you want to utilise and develop a comprehensive and detailed budget. Prepare a proposed timeline and set deadlines for when you want goals to be met.

Hire people smarter than you, and get out of their way


It can be tempting to hire a wholly local team in your target location from scratch, or rely simply on the executives in place from your parent company – but both approaches can be a mistake. The best method is to use the best of both worlds. Use senior interim executives who are motivated, have specialised knowledge and understand the business as it is to create your management team. Once the interim leadership team is selected, focus on outsourcing leaders from the local business, who will help you establish a permanent leadership team.

You will also need to find a reputable bank, freight contractors, and buyers. By understanding trade agreements and using the resources your government offers, you will be able to find great deals and may also be able to find qualified buyers overseas. Consider attending some trade shows in the region in which you are considering expansion. Just like forming a domestic business, networking abroad is crucial. Finding a local partner for your business can be one of the best ways to avoid the growing pains of expansion to a new market – and the embarrassment of an ineptly named widget.

Make an effort to understand the culture when expanding your business internationally


This goes hand-in-hand with networking globally. You should be focused on building relationships rather than finding out how much someone will buy your business. Make an effort to get to know the people you speak to. If they speak another language, try to learn some phrases, and bring an interpreter if necessary. Understand local body language as well. Firm handshakes or a kiss on the cheek as a greeting might be standard in your country, but could be unusual or even offensive to another. Try to research professional demeanour in different countries before setting up meetings.

Read up on the history and geography of the country – it shows that you respect the heritage of the target market, which will engender potential buyers to you. This goes for all the prospective members of your team – lawyers, bankers, accountant, and shippers. Being sensitive to cultural differences goes a long way in conveying your respect for others, which is an attractive quality to have when expanding business internationally.

Make sure your business is ready – legally, financially and tax-wise


Some countries have a reputation for frequent business litigation. Make sure you understand the legal market and gather a legal team which will minimise corporate risks. Be sure you follow the government rules in place for operating your industry within the country. Create localised commercial agreements and hire local counsel who is familiar with industry-specific regulations within your target market.

You’ll likely also need to outsource your accounting and tax functions to someone who understand the domestic rules for corporate tax. Establish local banking relationships, and understand how foreign currencies could affect your bottom line overall. Make sure you include this information in your final budget and business plan.

Creating an international business is complex and not for the faint-hearted. However, as our economies become increasingly intertwined, it seems inevitable that entrepreneurs need to prepare for cross-border transactions in some respects. The key step – as with any business – is to over-research and over-prepare before fully investing in a global business expansion. Understand your resources and find people and entities that you trust to help you. Blueback Global is ready to help you expand your businesses internationally, and to ensure you are compliant with complex markets around the world.