You’ve grown your side hustle to a full time gig. Now you find yourself in a position of expanding your business. When carried out correctly, expansion plans for any business can provide success and stability of your business. Taking your company internationally is a massive achievement and one you should be proud of being able to do. For instance, McDonalds successfully expanded its operations to multiple countries outside the US. Demonstrating that international expansion is not only possible but also rewarding with the right strategy and preparation.
However, operating internationally, be it creating bricks and mortar presence, a digital one, or hiring employees to work remotely from the country you’re setting up in, can pose some unique challenges. As a business owner, you need to be prepared to understand what is required of you to make it a success and not fall foul of any laws due to your operations or policies. The benefits of expanding your business, such as increased market share, access to new talent, and diversification of revenue streams, make these challenges worth overcoming.
Let’s look at the actions you need to take before international expansion.
Market
Just because there is a market for what you do where you are based, there might not be a market where you want to expand. This could be for many reasons; however, understanding the competition, demand, and general interest is vital, or else you could end up investing significant sums of money only to find you have no interest.
Cultural Understanding
This is key. Understanding the new territory your looking to enter cannot be emphasized enough. Your expansion plans need to consider whether the country is ready for what you do. Whether your overstepping the mark and breaking or going against cultural norms, standards, or ways of living. A great example would be a cannabis company in the US expanding into Middle Eastern countries and moving to the UK. As cannabis is illegal in these countries, it’s not going to be a worthwhile or even legal endeavor.
Economy and Politics
The economy and politics should always influence whether or not you choose to expand into a country. Lack of peace, for example, political unrest, the business infrastructure, etc., could all prove to be disasters for a business looking to expand in the region. So you need to be aware of the political and economic environment before deciding to venture into a new country.
Employment Laws
This is a massive aspect as different countries have different approaches to labor and employees. While one has rigorous laws and standards in place for employees, e.g., the UK offers statutory sick pay, a minimum of 28 days holiday, and has a national minimum wage, and they have strict employment laws around acceptable behavior, health and safety discrimination, etc. France does not permit email communication outside of defined business hours. The US, on the other hand, legally doesn’t need to offer vacation days or even parental leave for pregnancies. Understanding and complying with these laws is crucial for successful international expansion. For instance, you may need to register your business and obtain an Employer Identification Number (EIN) using an irs ein application service to legally employ people in the US.
If you are fortunate enough to have grown your business to go beyond your region, congrats. However, if we had to distill the approach you should take when expanding your business into one phrase it would be “Think Global, But Act Local”.
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