Go Global: 7 Arguments for International Business Expansion

It’s 2016. You can chat up your friend in Shanghai on the phone while streaming live English Premier League matches on your tablet as you kick up your Argentinian-alpaca-clothed feet. Why shouldn’t you expand your growing business overseas?

“The world is more interconnected than ever before,” says Fergus Cleaver, senior accountant and shareholder at New Zealand-based Cleaver Partners. “The barriers to global business expansion have therefore never been lower, even for small and midsize businesses that previously faced prohibitive costs and regulatory hurdles in overseas markets.”

Global shipping remains expensive, but transoceanic logistics networks have nevertheless improved greatly since the late 20th century. So too has communication, as anyone who’s used Skype, WhatsApp, or old-fashioned email can attest. And, most important of all, ecommerce allows people selling knickknacks out of British flats to connect with Middle Eastern royalty, middle-class Chinese and spoiled American teens.

So, whatever your company does, it probably has a viable path to overseas success. If you need more convincing, here are seven arguments for (really, benefits of) international business expansion.

  1. There Are More Customers Overseas
Well, yeah. Though the rate of growth is slowing, the world’s population is fast approaching the eight billion mark. More important, most of the world’s inhabitants are getting richer.

That’s a lot of people with a lot of money to spend. You won’t reach all of them next year, or even a decade hence. Even the world’s most recognizable brands have their limits—just because all of your friends have an iPhone doesn’t mean everyone in China does.

Still, expanding overseas is a great way to tap hidden, potentially lucrative consumers.

  1. Overseas Expansion Is a Profile-Raiser
“International” has an important ring to it, does it not? The fact is, companies with global pedigrees are more visible to more people. It’s a classic virtuous cycle—greater brand recognition begets greater market traction, which begets even better brand recognition, and on we go. Being the only global concern (even if “global” means one other country) in a pack of domestic competitors can be a powerful differentiator.
  1. More Baskets, Less Risk
The old truism “Don’t put all your eggs in one basket” applies. (Each country is a basket in this analogy, if that wasn’t obvious enough.) When you do business in multiple countries, you’re more insulated from, though not totally protected from, jurisdiction-specific political and economic risk. This is especially important for business owners seeking to expand into dodgy markets known for corruption, such as Russia.
  1. Economic Strength Isn’t Evenly Distributed
The rising tide of the global economy doesn’t lift all boats evenly. Even as one nation’s economy hums along on all cylinders, its neighbor’s could be sputtering. Case in point: The economic fortunes of the European Union and United States have diverged sharply in recent years, with the United States clearly better for local and international businesses alike at the moment.
  1. Consumer (And Business) Tastes Vary
The world might be more connected than ever, but that doesn’t mean global consumers are interchangeable. Sociocultural gulfs remain deep—and, all too often, unbridgeable. The downside to this is that global companies’ products very often need to be tailored to the whims of international consumers. The upside is that what doesn’t work in one market might work beyond your wildest dreams in another, sometimes against all logic.
  1. Less Regulation and Compliance Requirements
Hey, it’s business. Some emerging economies are shockingly (by first-world standards) loose on the regulatory front. That’s great news for cost-conscious, ethical international entrepreneurs.
  1. Lower Taxes...Maybe
If your home country has a high corporate tax rate, you may be able to reduce your tax burden by relocating your domicile there. Be careful how you do this, as sovereign tax authorities are ever more attuned to the problem.

Look Before You Leap

An international business expansion is nothing to sneeze at. Before you commit to bring the products or services your neighbors have grown to love to an entirely new, potentially very different overseas market, make sure your ducks are in a row. Canvass your industry peer group or trade association for businesspeople who’ve successfully made the transition to multi-country status. Speak with your country’s foreign trade office. Cultivate contacts in your target market’s local and national governments.

In short, do it right. And if you’re not sure how to do it, ask. The upfront effort could mean the difference between success and failure.



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