7 Best Tips for Moving Your Business Abroad
Things are going so well that you’re expanding your business, well here are the BEST tips for moving your business abroad.
Doing business in your own country can be tough enough. When you decide to expand overseas, the challenges will multiply at least 10-fold. But if you are committed and persistent, you can be successful. Below, you will find some key tips to getting launched in a foreign country. If you follow them, your path will be much easier and your launch much smoother. Here are the seven most important steps you should take.
Know the Laws and Business Practices
Setting up a business in a foreign country can take from a single day (e.g., New Zealand) for many months. Taxation, banking, import/export, and contract law all vary, not to mention real estate/property laws if you plan to rent or purchase the property.
This same piece of advice will serve you well in several matters: find an ex-pat lawyer who is residing in the country or countries into which you plan to expand. S/he will probably be well-versed on all of the ins and outs of setting up a business in your target country. Barring that, locate an attorney who is fluent in your native language – one who can explain the process of setting up a business in terms that you can understand.
Educate Yourself in the Culture
It is estimated that only about 25% of American businesses that try to set up overseas are successful. (This does not apply to e-commerce sites that remain based in the U.S. and serve an international audience.) And one of the main reasons is the failure to understand enough about the culture to appeal to the local target audience.
A marketing campaign for a product may be really successful in your home territory but can go terribly wrong elsewhere.
And it’s not just the little guys that get things wrong. Here are a couple of monumental goofs from “big boys” who failed to spend enough time researching how their product would be received and how they should market it.
- Pepsi launched in China with its same famous slogan, “Pepsi brings you back to life.” Unfortunately, its literal translation into Chinese meant, “Pepsi brings your ancestors back from the grave.”
- Pepsodent Toothpaste moved into Southeast Asia with an emphasis on how it whitens teeth. People in Southeast Asia chew betel nuts to blacken their teeth because they find that attractive. If the company had focused on decay prevention, it could have done much better.
These are just two examples of the need for exceptional language translation services. Finding a native or team of natives from the target country, who can explain cultural and linguistic nuances as you begin to set up shop and before one piece of marketing material is designed, is critical. Do not scrimp on this aspect of your expansion.
The Political Climate
Political instability can be a “killer.” Governmental changes of power can result in assets being frozen, new and exorbitant taxes being imposed, and, as many companies witnessed in Cuba decades ago, complete government takeover. And in2013, the government of Cyprus went into every bank and took 10% of all of its deposited funds as a new “tax,” as those banks were being bailed out by the EU.
Set up shop in a country that has had a relatively stable political history. You probably want to avoid countries like Somalia, but there are other African countries that are quite stable. Just do your research.
It’s also nice to find countries in which the governments welcome foreign business and provide incentives for them to come in.
Get the Right Legal Advice
As mentioned earlier, it is great if you can find an ex-pat lawyer who is practicing in your target country. If you do use a native lawyer, it would be a good idea to have an interpreter with you – someone you can trust to explain things in your language down to the last detail. More than one business has been “burned” by the “fine print,” both in the interpretation of business regulations and in contracts. Just be very careful, and get a second opinion if you have any doubt at all.
Establish Relationships with Local Business Owners
In the U.S., there are formal and informal business networking groups/organizations. Many other countries have their versions of a Chamber of Commerce or business associations. Join them and become involved. In fact, it might be a good idea to this during the several exploratory trips that you should be making before your actual launch. Other business owners can be great resources.
Once a decision is made to expand abroad, the excitement of it all can cause you to want to leap in quickly and just get it done. Above all else, avoid jumping in quickly without checking out every ingle detail. It will help if you can discuss all of those details with any other native business owners like yourself who have set up shop in the same country you are moving into. You will get all of the little nuances that you may not get going through attorneys and other authorities. Sometimes, it’s the little cultural things you may not understand or those little local tips that will streamline things for you.
Hire Key Locals
Marketing will be critical to your business launch and subsequent growth. Even if you plan on relocating many of your own native personnel, get some locals into that marketing department. Customer service will be another area in which locals can be invaluable. Spend some time thinking about which positions will be better served by hiring locally – you will be glad you did.
These are seven key tips, though there are probably many others. Take your time, do your research, get the right expertise. Spending more time on that up front will serve you well down the road.
Some countries are better for startups than others. If you’re looking to speed the process, consider Inc.’s top four countries for business startups: Singapore, Canada, Australia, and New Zealand.