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Nothing says growth like setting up your business overseas. Operating in a new foreign market is a huge yet exciting task for an entrepreneur. However, if you’re considering such a move, be sure to thoroughly research your new market and all your options beforehand.
Depending on your business, there will be many things to plan for. For example, from insurance and tax to shipping laws, there will be plenty of details to take care of.
Therefore, before taking this next big step, consider the following items when you’re making your international growth plans.
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Research the New Foreign Market
The first thing you should do is spend a long time looking into and researching your desired foreign market.
Investigate competitors, trading laws, local cultures, and potential locations to name a few.
That’s because it’s important to be objective when you’re researching. It’s all about finding the gap in the right market. In other words, be strategic in your planning, instead of picking the location where you’d personally rather set up.
Consider Your Market Entry Strategy
It’s also important at this stage to consider your market entry strategy. For example, what obstacles are you likely to face in this foreign market? And how will you go about resolving these issues?
It’s always best to consult legal specialists before making any overseas plans for your business. That’s because they will be able to best inform you about international laws. For example, firms such as Withers offer personal and strategic advice on setting up your business abroad.
Will You Be Exporting to a New Foreign Market?
If your business sells a product, the easiest method with the lowest risk is to start exporting your goods outside of the country you currently operate in. This is also a cost-effective method. That’s because you won’t need to invest in production methods in a foreign country. You can simply ship the products you already make in the location where your business is already based.
However, if you’re looking to start exporting to a new foreign market, it’s important to forecast your new expenditures. For example, consider the rising cost of transportation.
Are You Planning on Franchising in the New Foreign Market?
If you haven’t already, it’s time to think about franchising your business. Franchising your business means that other business owners can open branches of your brand. Then, these other business owners pay you a fee and sometimes forward cuts of their profits to you.
This is a great way to break into new markets, especially in a foreign market. That’s because you are allowing someone with more experience in that location to manage that branch.
For example, if you’re taking your business to a new foreign market where you aren’t overly familiar with the language, allowing a local businessperson to run the new branch will be invaluable.
Think About the Compromises You’ll Have to Make
However, franchising your business does involve a lot of compromises.
That’s because you’re essentially handing over your brand to other people to manage in distant locations. Moreover, if your foreign franchise should be mismanaged, your brand could suffer irreversible damage in the new market you’re trying to crack.
Consider Starting a Joint Venture in the Foreign Market
However, if you don’t want to franchise your business in a foreign market, you could consider starting a joint venture. With this method, two companies establish a jointly owned business.
The partnership would consist of your already established brand working with that of a local business in the area you’re trying to tap into.
Your two companies would work together to provide the new business with a management team. Both parties would share control of the venture.
This gives you a chance to work with someone already operating in the area to share both knowledge and experience. This should allow your business to grow more quickly in the new foreign market.
Expand to a New Foreign Market Successfully
Are you ready to expand your business internationally? Hopefully, this article has given you some ideas about how to take your company into a new foreign market successfully.
