A boost in operations goes beyond the U.S. borders for many businesses, which makes the global expansion definition incredibly important. If your company is in talks for international growth, we’ve pulled together a few best practices that can help you start planning a strategy.
Going global is an increasingly promising option for companies that want to hit the next level. International markets open up the door for new talent and customer acquisition, which creates opportunities to drive more revenue and innovation.
First, Let’s Explore the Global Expansion Definition
Global expansion is taking operations into a new, overseas market. Companies establish a legal presence in the new country through a foreign subsidiary or one of the agile methods that we will explain later in this article.
Despite its popularity, many companies find it difficult to expand overseas because of compliance and regulatory barriers. In fact, 57% of U.S. companies have cited a restrictive regulatory environment as the main barrier to globalization.
There are difficulties involved with overseas expansion but it may be a vital part of a company’s strategy to obtain desired growth. According to Rutgers, 80% of executives believe that a company needs to enter an international market to achieve long-term growth.
If your company is considering international expansion, a few booming markets include Toronto, Bali, Hong Kong, Santiago, and Tel Aviv.
Global Expansion Best Practices
To help your team get an idea of what it takes to expand overseas, we’ve compiled a condensed list of best practices for global expansion. First and foremost, we suggest putting together a strategy for international growth. Your company’s strategy should highlight goals, target markets, and cultural connections to keep your headquarters aligned with your overseas operations.
Use an Agile Approach
Take comfort in knowing that your company doesn’t need to fully commit to a country by establishing a foreign subsidiary. Your team also doesn’t need to solely rely on international independent contractors to get work accomplished. There are options including entity establishment and an Employer of Record solution that allow companies to keep tabs on compliance while maintaining control of their operations.
Working with a third-party provider to handle regulatory requirements and difficult tasks like international payroll can help your company get established in a new country quickly and efficiently. Using one of these agile approaches for hiring, payroll, and HR is the best route. Basically, avoid investing in large assets and commitments until you’re certain that your move will be a success. By taking smaller, flexible steps in international growth, you’ll typically find greater results.
Embrace the Culture
Your target country’s culture will be a key section of your global expansion strategy. Before committing to a market, even with one of the agile approaches listed above, test the market through personal research.
Whether it’s you, your business partner, or the entire team, the decision-makers in a company need to visit the target market and spend some real-time there. While overseas, learn about the customs, people, places, and successful businesses. This research includes a clear investigation of your competitors.
The primary cultural differences you’ll find relate to language, religion, management style, gender discrimination, skills, personalities, and education. In order for your company to find success, you’ll need to determine if your firm can adapt to the cultural differences and determine how to do so in a way that stays true to your business.
One of the most effective ways to learn the culture is by establishing partnerships with local, trusted experts. Find an international partner that has access to an extensive network of potential customers and employees. This helps you quickly gain access to the market when you establish your legal presence. Your partner may end up developing new business opportunities if you’re not readily available to travel overseas, which makes their network incredibly valuable.
Also, consider developing relationships with local legal providers, human resource leaders, benefits brokers, and recruiters. Plus, consider various strategic business partnerships with local companies. A company that compliments your service or product may be another way to get quickly introduced to the foreign marketplace.
Rely on an Experienced Team
Our team of experts works in over 185 countries and helps businesses, like yours, develop a legal presence in new markets. If you need assistance with global expansion or simply want to know if this type of growth is the best option for your company, give us a call.