By Keavy Slattery
As an entrepreneur, deciding whether to expand your business internationally can be difficult. You may feel apprehensive about it, and rightly so! There’s a lot at stake if you choose to take the leap of faith into international waters. Will your business survive in a global market? Will you be able to adapt to a foreign culture? Is it the right time? Yet global expansion can be fundamental to the growth of your business and can provide you with an array of new opportunities.
So, how do you know if and when it will be the right time to take your company into an international market? And have you considered everything you need to do before doing so?
Are you ready to expand into an international market?
Before you begin thinking about expanding internationally, you need to evaluate your current business. If your current business isn’t commercially successful or financially stable, your expansion overseas could really suffer. To help you determine if your company is ready for the global marketplace, here are four key elements you’ll need to assess:
1. Where are you in your local marketplace?
It’s no use expanding your business if you don’t already have a stable foundation. Evaluate your position in the local marketplace and think about the following questions in relation to your business:
- Is your business where you hoped it would be at this point in time?
- Where are you in relation to your competitors?
- Are you profitable and showing signs of progress?
If your business isn’t where you had hoped it would be, it’s time to take a step back, reevaluate, and head back to the drawing board to figure out how to get where you want to be. However, if your business is doing well, global expansion could be a good next step.
2. How are your finances?
You don’t want to jump into a new market without ensuring you’ve got the funds to back you up. The financial position of your company is very important as it will enable you to invest in your new international market while also keeping your current trade afloat.
Your overseas brand will require a lot of money to build and will likely only bring a small amount of return within the first six months or so. This means your present business will be a support system during the expansion, so making sure that you’re in a good place financially is vital.
Lucy Cohen, co-founder of Mazuma Accountants, says, “My biggest advice would be to have enough cash to be able to make mistakes. Expanding into a different market is a new experience–don’t expect it to go exactly the same as your business in your home country. Make sure that you have the resources (both time and money) to take your business overseas properly–don’t do it if you can’t commit to it.”
If you haven’t already done so, you should hire an accountant to look at your overall income, profits, outgoing costs, and other expenses to determine whether you’re in a good position for global expansion. An accountant will also be able to determine how much you can invest in your new business while keeping your current business afloat.