Creating a Plan for Success Global Expansion
Yes, scrupulously strategizing your move into the unfamiliar offshore markets is absolutely essential. Planning is the key to a safer approach to global expansion.
“Any company considering expanding into another country must conduct a thorough due-diligence process to understand the target country’s legal, regulatory, and cultural environment before the expansion process begins,” warns Financial Executives International. “Without this research and understanding of the target country’s unique suite of costs, the company may discover down the line that it had not asked the right questions, and exposed itself to considerable financial and reputational risks that could have been otherwise avoided.”
Clearly, a solid business plan can make or break you. To help you get started, here are seven steps to guide you through breaking into offshore markets:
1. Research Emerging Markets and Choose Carefully
What you sell and to whom you sell it is key. True, finding your niche can be a challenge in today’s ultra-competitive and fast-paced market. Still, there are plenty of opportunities and new emergences to go around.
Once you find a potential niche in an offshore market, take time to do rigorous market viability evaluations before committing to ensure you have a solid foundation for your endeavor.
“If you’re going to spend your time making a product, then spend your time making sure it’s the right product for the right market,” advises Forbes.
Beyond the market, consider these regional factors:
The social and political stability. – Of course, no region is immune to social and political unrest. Still, some regions may carry a higher risk than others.
The geographic risks. – Some areas are especially susceptible to natural disasters such as typhoons, flooding, wildfires, earthquakes, volcanic eruptions, and other disasters. Major droughts and other environmental factors are also important considerations.
The economic condition. – The cost of real estate, local consumer habits, and the current economic state may well affect your decision.
In addition to these factors, it’s worth looking into which nations have free trade agreements with your place of origin and the agreements’ parameters to see if you can benefit.
2. Make a Viable Financial Strategy
Budgeting is a cornerstone of conducting a successful business. Therefore, you’ll need to create a comprehensive budget outlining all factors affecting your bottom line.
Don’t forget to budget for:
Taxes and tariffs. – Carefully calculate the taxes and tariffs your operation will face, and remember the rates can rise anytime.
Rising travel and shipping costs. – As fuel prices increase, be prepared to spend more in these areas.
Hidden costs and the unexpected. – Leave a reasonable safety blanket in the budget for miscellaneous expenses that inevitably arise.
Once you make a budget, follow through by ensuring that you stick to it.
3. Establish Trustworthy Partnerships
No global business is an island. So as you scout out the market, look for ways to generate mutually-beneficial relationships with supporting companies.
As you break into an offshore market, you may need to connect with local…
Freight and logistics brokers
Real estate agents
HR and staffing companies
Be sure to conduct denied party and sanction screening to ensure you’re connecting with reputable and legal trade partners.
4. Get People on the Ground
Attempting to handle everything from afar can create glaring inefficiencies and an overall disconnect between processes and people within your company.
Invest in getting trustworthy people on the ground. Additionally, sourcing help from local talent is invaluable, as you can more easily bridge cultural and language gaps to connect with trade partners, understand your market, and improve operations.
5. Prioritize Compliance with Trade Laws
No matter how good your product or how hot the market may be, you won’t stay in business without complying with local regulations and trade laws.
Here are some major items on the trade law compliance checklist:
Obtain all required licenses and permits.
Meet all documentation requirements for export and import.
Pay all applicable taxes and tariffs.
Cooperate with legal non-tariff measures.
Ensure accurate product classification.
Conduct denied party and sanction screening.
Complying with the law protects your company’s reputation, prevents legal repercussions, and helps you conduct business confidently.
6. Adapt Offshore Marketing
Learn about cultural values and norms in the market destination and adapt your marketing approach accordingly.
Consider these region-specific factors when creating your offshore marketing campaigns:
Appropriate dress and grooming.
Accurate and respectful language.
Invest in local partnerships, including paying for high-quality translation and digital marketing services. Consult with locals before launching an ad or finalizing a product design.
7. Invest in the Right Global Trade Optimization Tools
As with a builder, the success of a global trader often depends on the quality of their tools. Even the most business-savvy trader can find it nearly impossible to stay compliant and profitable without integrating powerful optimization tools.
OCR Global Trade Management offers a powerful collection of web-based tools to help traders break into offshore markets successfully.
At OCR, our full suite of global trade management tools includes:
These global trade management tools are thoughtfully designed to protect traders from the common legal and logistical pitfalls of tapping into offshore markets. Our tools can help you have confidence in your offshore strategy, ensuring you’ve done all you can to tick the boxes and mitigate risks.
From supporting fledgling startups to integrating enterprise solutions, OCR has a long roster of successful partners representing all industries, from tech to finance.
Ready to get started? Reach out to find out more about our custom global trade management solutions.