The Top Benefits and Risks of Expanding Your Business Internationally

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Throughout the years, many companies have expanded their business internationally. And while some fail to become successful within the global market, others have succeeded – take fast-food giant McDonalds, for example. 

If you’re thinking about expanding your business internationally, there are, however, certain things that you’ll have to consider – including which markets you try and target, what payment methods you use and how you’ll ship products to your customers. Along with looking at these considerations, you should also pay attention to the benefits and risks that come with expanding your business internationally.

But if you’re unsure as to where to start with this, the process can be daunting. To help with this, here are the benefits and risks to pay attention to:

Let’s start with the benefits:

It Will Help To Improve Your Company’s Reputation

When you start to expand your business internationally and it becomes a success, people start to recognize your brand and your company’s global reputation improves. Although it’s not an easy feat to accomplish, when it’s successful, it can transform the way that people view your business.  

You’ll Have Access to Local Talent

By expanding your business abroad, you’ll be able to access a new and exciting pool of potential workers. Each of these workers will come with their own unique skill sets and talents – something that’s incredibly beneficial as they will be able to create innovative new products/services that gives you an edge over your competitors.

Market Diversification

When your business expands internationally, you could reap the protection that comes with diversifying your assets. Safeguarding your business’ bottom line against any unforeseen events in the future, it allows your business to continue operating. It will also allow you to introduce extraordinary products or services to a wider demographic, helping you to unlock high sales revenue and ROI.

Faster Business Growth 

Perhaps the biggest benefit that comes with global expansion is the increase in growth that your business will face. Entering international markets will not only expand the footprint of your business but will lead to further expansions as new audiences discover what you have to offer.

Now, onto the risks:

Local Competition 

One of the biggest challenges that you’ll face is from the local competition. Businesses that are offering a similar product/service and have been around for years before you might have a holding on the market. Therefore, you’ll have to find ways in which to differentiate your business so that it’s appealing to customers.

Political Risks

Another prominent risk you could face when entering a global market is the instability and uncertainty of politics within the various countries. Therefore before you expand into a new market, you must conduct a risk assessment of both the political and economic landscape.

Tax and Compliance

When you’re dealing with fees, taxes and tariffs for international trade it can be very daunting. Which is why it’s so important that you hire a professional to correctly and efficiently handle these. Similarly, you’ll need to be aware of trading regulations and standards so that you’re successfully compliant.

Issues With Currency

When entering new countries, you’ll undoubtedly face the challenge of currency. Not only will you need to price your products/services competitively, but as currency can fluctuate significantly, you could one day wake up to find a huge loss in your business’ value. 

The Difference in Culture and Language

One of the most important things you’ll need to research is the culture and how you will translate your content so that it’s suitable for the country you’re looking to newly operate in. 

While the latter can be fixed by using a translation site such as Architekst.com and by hiring an employee that’s fluent in the language, the culture is something that you’ll have to get right from the get-go. A big risk is not knowing how to promote your business in a way that aligns with culture – as western and eastern culture is so different.