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How to Start a Business Abroad – And Make It Successful

Starting a business on home soil is one thing; starting one abroad is quite another.

Of course, there are plenty of doors of opportunity when looking to expand across national borders. These days, our global economy offers entrepreneurs a plethora of opportunities to take advantage of to expand client bases and exponentially boost profits.

But there is a myriad of different factors that need full and serious consideration before embarking on foreign business endeavors.

Keep the following considerations in mind before taking your business overseas.

Ensure This Endeavor Makes Economical Sense

You might think you have the success at home to warrant global expansion, but does it truly make financial sense to expand? Consider your current cash flow, your current capital cushion, and your prospective profits.

You’ll need to take the subjective lenses off, and be truly objective in order to make an informed decision. Lots of historic economic information coupled with sound and realistic predicted profits is essential.

Conduct Market Research in the Location You Plan on Doing Business in

Before you even step foot in another country, make sure there’s a market for your products and services first. It’s crucial to spend time investigating what the market is like, and closely analyzing the spending habits of the locals.

Is there demand for your specific product or service? If so, does it warrant a start-up in that country to generate sizeable profits?

You’ll also need to dedicate a certain amount of time and money to market your business in these foreign locations. If possible, consider making a trial run or conducting polls prior to investing your precious time and hard-earned capital.

Localize Your Business

You’re no longer in the US – what might work at home might not necessarily make sense in another part of the world. Just like America has its own unique culture, so do other parts of the world.

For this reason, it’s critical to understand the culture(s) that you plan on immersing your business in, and “localize” your products and services accordingly. Essentially, this means adapting your product or service to meet the demands and needs of a certain culture and language.

Take Starbucks for instance. The coffee giant includes localization into their business strategy when starting up stores abroad to ensure the look and feel of its shops are appropriate for the country they’re in. This enterprise is obviously a little bit different as they already have that worldwide audience and following that already knows about their brand. With every store Starbucks opens around the world, they try and make each store seems similar enough to the business, but they also try and incorporate some of the cultures of the country into the store. They also ensure that each store is set up with the best enterprise point system to keep their stock in check and their customers happy. Big enterprises, like Starbucks, need that sort of software due to how popular the business is.

When Starbucks sets up a store in another country, they use international designers to travel to foreign locations to determine how to mix the brand’s design with the local culture. In Mexico, for instance, patrons expect to hang out in a bar-type environment. As such, Starbucks designers create their Mexican shops in such a way to appeal to the needs and wants of their Mexican client base. And while you’re localizing your business, if you have a branch in the same area, it is a good idea to have iot video surveillance that is accessible from a variety of locations. My friend was telling me about the service that Arcules provides, informing me that their system is integrated with a localized cloud that means you can access your video feeds from basically anywhere! Worth looking into certainly. This had got me thinking… I could also sell my products online to attract even more business. I was looking at how to design shopify website as this is the easiest place to start!

Consider Whether Your Branding Should Change

Along the same lines as localization, it’s in your best interest to determine whether your branding can stay the same, or be altered to accommodate the local culture.

There are different perceptions and sensitivities among various cultures of the world; you don’t want to turn off the local demographic because you used an image or logo that is offensive in that culture, even though it’s harmless and neutral in yours. Failing to research how your brand will be portrayed and accepted in a foreign market could be detrimental to the success of your international expansion.

Understand the Tax and Legal Issues Surrounding Your Foreign Business Expansion

You may be well versed in the realm of US tax implications when it comes to conducting business, but things may not necessarily work the same way in foreign countries. It can be very costly for your business if you don’t take precautions when it comes to how legalities and taxes work abroad. In fact, one of the biggest mistakes that American entrepreneurs tend to make is assuming that they’ve got the same property protections in other countries as they do in the US.

In this case, it’s crucial to round up a competent team of legal and accounting professionals who are educated and experienced in both US laws and taxes, as well as those in the country that you wish to plant business roots in. You will also need to look into insurance in foreign countries. You know that if your current business has customers coming on and off your premises then you’ll need public liability insurance, but is it the same in the country you’ll be expanding to?

Enlist a Trusted Local Partner

Having eyes and ears on the ground is extremely helpful in order to simplify the process of establishing and growing your business on foreign soil. Ideally, such individuals should either be native to the area, or at least closely familiar with that business culture.

Assigning a local partner also can be extremely helpful if you’re unfamiliar with the local language and euphemisms. A resource like this can really go a long way.

The Bottom Line

Starting a business across the pond will surely entail plenty of research and due diligence. But by taking the above factors into consideration, expanding your business globally can be an incredibly rewarding and successful financial endeavor.