Growth is the aim of any business, and sometimes that means opening your doors to international customers. There are many different ways to expand worldwide, and they all call for different skills and knowledge. To give you an idea of which direction to travel, we’ve put together this series of international business expansion strategies.
Building positive relationships with well-established foreign businesses is a great way to begin expanding. If you have similar goals to one of your foreign business partners, you may have the capacity to help each other out. If you’re a small business, a global partnership is the best direction to go because it won’t come with additional expenses. However, you will still need to transfer funds internationally, which can be expensive. To reduce costs, consider using the Ria Money Transfer app, which is easy to use and cost-effective.
Licensing agreements are a fantastic way to expand across borders, and they’re relatively low risk as well. These types of agreements allow companies to use another’s intellectual property (IP). In most cases, the foreign company being given the license is already established, which means they’ve already captured the market.
Mergers and Acquisitions
When two businesses come together to become one, this is called a merger. An acquisition, on the other hand, is when one business takes over another. Thanks to advances in technology, the number of mergers and acquisitions has increased exponentially over recent years. Regardless of how your business expands, it’s essential to understand foreign regulations around ownership. For example, foreign companies aren’t permitted to own more than 25% of an American airline.
When it comes to acquisitions, you don’t need to buy a fantastic business. Instead, you acquire a budding business and then build it into a success. This way, you’ve got the groundwork in place already, which saves a lot of hassle.
A simple strategy for entering the international market is by exporting, which saves money by bypassing the need to create a subsidiary. To expand by exporting, you will need to have agreements in place with retailers, distributors, and marketing agencies. This process can be fairly complicated, and you need to know how to receive the best deals, but it will be worth the hard work when your products are live on foreign soil.
Work with a Global PEO
A global PEO, which stands for “professional employer organization”, will liaise with your company to help navigate operations in foreign countries. These experts use their knowledge to enhance your global business strategy, research cultural differences, legal, and financial differences and help to remain compliant. If you decide to work with a PEO, your expansion strategy will be correct from the beginning, which saves you the headache of hitting hurdle after hurdle.
Opening your business to international borders is a great way to expand, but there are countless obstacles to overcome including regulations, culture, and finances. The route you choose will ultimately depend on your business’s current capabilities, financial position, and in-house expertise.
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