New growth opportunities in foreign markets emerge quickly, and tech firms take advantage of these opportunities—and increase their chances of outpacing their competition—by relying on International Professional Employer Organizations (PEO).
Whether your tech company seeks revenue growth, premier talent, greater scale and efficiencies, or all of the above, International PEO presents a flexible, scalable global expansion method to reach these goals—no matter where international business leads.
Reason #1: Accelerated Time-to-Market
Traditionally, expanding internationally meant setting up an entity, which can take months for companies to begin operating in their target markets. International PEOs help businesses reduce their time-to-market, ensuring minimal interruption to their day-to-day activities. No other global expansion method enables organizations to break into new international markets compliantly at this speed, creating a greater chance of outpacing their competition.
While all International PEOs accelerate time-to-market, Velocity Global’s International PEO solution reduces time-to-market by up to 90% when compared to establishing an entity. However, not all International PEOs offer this same expedited experience.
Speed-to-market gives tech companies a leg up on their competition by allowing earlier access to new customers. For those concerned about product-market fit (that is, how well does their product or service for their target market’s needs), International PEO enables firms to test markets before committing to a long-term presence.
Reason #2: Significant Cost Savings
The costs of exploring, planning, and establishing a presence in new markets quickly compound, stretching budgets long before organizations can start doing business. International PEO makes global expansion more financially attainable in a number of ways.
Tech companies save up to 60% with select International PEO providers when compared to traditional entity establishment. While each market and project varies, those setting up an entity in a new market expect to pay $15,000 – $20,000 for initial setup costs, and around $40,000 on annual maintenance costs. If organizations plan to hire dozens of employees or more, they must plan for much higher costs.
Tech firms must also factor in soft costs (costs that are not easily quantifiable). Executives spend 160 hours on average researching and completing all required documentation before setting up an entity. This time away from managing day-to-day priorities compounds and creates unforeseen complications for executives and their teams. Additionally, what opportunities do companies lose due to executive distraction and time spent reviewing and signing contracts? In that time, businesses may lose out on any time-sensitive opportunities in that market.
If a company leaves a market for any reason, they become saddled with entity dissolution costs—and headaches. With International PEO, organizations exit markets without the steep costs and lingering complications associated with entity dissolution.
Reason #3: Streamlined Path to Global Growth
Global expansion is an arduous undertaking with many moving parts. However, International PEOs simplify the entire process. International PEOs handle all risk mitigation, compliance, payroll, and benefits considerations. Companies with entities must contend with numerous monthly responsibilities, including payroll administration, currency exchange, federal reporting, and many other requirements. Firms rely on International PEOs to handle these considerations.
Businesses take advantage of multi-market mobility, too; International PEO enables companies to expand into additional markets as seamlessly as their initial international market. However, not all International PEOs offer the same global coverage; some organizations have limited reach, while Velocity Global offers support in more than 185 markets.
Go Global Faster and Smarter with an Experienced Expansion Partner
Pursuing and capitalizing on international growth opportunities is all about timing and commitment. But if businesses do not have the time, resources, and expert support needed to pursue these opportunities confidently, they likely spend tens to hundreds of thousands of dollars with little to show for their effort.
International PEO mitigates global expansion’s risks, and gives firms the flexibility, confidence, and support they need to capitalize on overseas opportunities.
Want to learn more about how Velocity Global’s International PEO solution elevates your global expansion experience? Reach out to us today.