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What to consider when expanding your business overseas

Have you started to think about expanding your business internationally?

Whether it has always been a part of your business plan or you’re responding to recent international interest, the decision to move overseas is both challenging and rewarding. 

It’s often tempting to choose countries you’re familiar with or have heard about from other companies. However, this isn’t always the best indicator of what will be a good fit for your company.

To help you in your initial planning stages, here are some things to evaluate when deciding on what country to move into.

Ease of doing business

Every country has its own unique laws, tax requirements and financial systems. Some countries are incredibly favourable to international business, offering tax incentives, start-up support and even government funding. At the same time, others are more difficult to manage with lots of bureaucratic red tape. Infrastructure, political climate, and professional image among other countries also contribute to how easy it will be to move into a particular country.

Before committing to a specific market, do your research. Consider whether time, cost and difficulty of doing business are worth the potential payoff you expect the new market will bring.

Available talent

Before you set your heart on an expansion plan and specific country, you need to know if there will be someone to help you execute it. Even doing some basic preliminary research into the talent market of your chosen country will help you create a realistic strategy.

Difficulty finding local talent doesn’t always have to foil your plans either. Many companies choose to send current employees internationally on assignment. However, these situations are usually dependent on the willingness of the employee as well as attractive compensation packages.

Regardless of the outcome, it’s helpful to have this information ahead of time. You don’t want to be in a situation where you need to delay plans while you struggle to put together a team.

Cost of labour 

Lowering the cost of labour is often a determining factor in where companies chose to employ overseas. But even if this is not your highest priority, it’s important to realise that typical salary amounts vary around the world. 

You’ll need to develop a policy around wages reasonably early on in your expansion plans. Ask yourself whether you will pay a global salary, standardised across all employees or instead cater to the specific country your international employees live in. This means offering compensation in line with typical salaries for that role and cost of living in their home country.

Depending on the country, this may mean having to increase labour costs to cover a higher cost of living, or you could save money in countries that have a lower cost of living. Offering a standardised salary may not attract talent in higher-cost countries. In contrast, it may be two or three times the norm in lower-cost ones. 

For an in-depth look into different payment structures read our article on What You Should Pay Your International Employees.

Travel

Depending on your company and the business you do, you may want to visit any new countries you’ll be expanding to. This may be for preliminary market research, meeting with clients, training new staff or just because you want to be familiar with all of your business functions.

Travelling for work always sounds glamorous, but it rarely feels it when you’re 14 hours into your long-haul flight. Even with business class benefits and airport lounges working on the go can be tricky, and jet lag can be painful for both your body and productivity.

Of course, travel is often an essential part of being a global brand, and it should in no way deter you from making the step to expand. It’s usually an enriching and expanding experience both personally and professionally. However, it pays to be realistic about how much travel you can maintain long term. If you’re travelling from the States to Australia once a month, it won’t take long for both your finances and general wellbeing to take a hit. You may find somewhere closer to home more manageable or commit to the trip only a few times a year. 

Similarly, it’s a good idea to check out how accessible your locations are. Are you setting up in a major city with an airport, or will it take two flights, a bus and a ferry to reach your chosen location? Thinking about this early on will save you time, energy and money in the long run. 

Timezone 

Timezones are not the enemy they once were. With communication channels like Slack and online storage like Google Drive and Dropbox work and conversation can be more asynchronous. This means instructions and feedback can be left in open communication channels instead of relying on teammates to get back to you during your office hours. With these advancements, there doesn’t need to be a 100% timezone overlap with your teammates. However, this isn’t to say there shouldn’t be some.

Remote workers, particularly those who are physically isolated still require connection with their teams, the ability to collaborate with co-workers and one on one time with their managers. All of this not only helps them feel less isolated from the team but improves their ability to do their work well.

With this in mind, it’s a good idea to check out the time difference between you and your intended hiring country. Are you prepared to have all your meeting with this person early in the morning or late at night? Will this become a problem over a sustained period of time? What about the first few weeks on the job, when you’ll be scheduling training calls and may need to be more available for questions and feedback?

Local network

Having local contacts is by no means mandatory for entering into a new market. It does, however, make the process much more comfortable.

If you already have business connections in another country, this may influence where you decide to go next. Having an established network takes away a lot of the guesswork involved with taking your business somewhere completely new. 

Whether that be current clients, previous business associates, different branches of current vendors it can all help make the transition a little smoother.

If you don’t have any current connections, ask around. Chances are someone you know has a connection themselves or knows someone who has done something similar. They may be able to help you bypass some difficulties or share some of the knowledge they gained through their experience.

Language

Doing business in a country where your language is not supported is by no means impossible. However, it is still something you’ll need to consider. Day-to-day communication may be covered by your on the ground team. Still, you’ll also need to have some way to fill out official documents, speak with any vendors such as your bank, and fulfil payroll requirements for international staff.

This may require hiring a full-time interpreter, or connecting with a third-party service provider to manage in-country administration tasks for you. 

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