Thanks to technology, the world is getting smaller every day. Companies, eager for new markets, are taking advantage of the shrinkage to cross borders to spur growth. Global expansion isn’t easy, but if done correctly, a brand can reap great rewards.
Expanding a company’s reach without careful research and planning, on the other hand, can yield disaster. It’s those case studies that give some businesses pause when they consider global expansion. However, poor planning by one company shouldn’t keep others from making the attempt.
A little wariness is healthy for businesses looking to grow. Anticipating pitfalls and identifying ways to sidestep them will help make the move successful. Here are four ways to overcome your hesitations to take your brand global.
Attract the Best Talent
The key to international success is recruiting workers who understand the market, the culture and the language. As more companies expand their reach, you may wonder if you will be able to attract the right people. Fortunately, there is more than one way to find them.
If you aren’t ready to hire for full-time positions, take advantage of the gig economy. Hiring independent contractors allows you to move in and scale up more quickly. You just need to find the best contractors out there.
So many independent contractors feel totally separate from the companies they work with. You can attract high-quality talent by offering international contractor benefits such as health insurance, stock options or paid leave. Hiring contractors allows you to work with the best talent in the space without going through full employee onboarding.
If you need to fill full-time positions, work with a reputable employer of record in the expansion country. They can help you recruit, hire and onboard employees, while staying in compliance with local employment law. There’s no reason to put expansion plans on pause because of hiring obstacles with so many options available.
Bridge the Gap
Global expansion creates gaps in your business, in physical distance, cultural divides, and language differences. Optimal use of technology can close these gaps and keep a company connected, no matter where it roams. The first step is to stop making assumptions.
Assuming everything works the same in an expansion market as it does domestically is an epic error. Do your homework by researching the market thoroughly to understand differences and identify your competition. You may need to use unique communication channels and messaging to market and sell your products and services.
Internally, implement communications systems that keep your employees and contractors connected wherever they are physically located. Cross-cultural teams that can work in sync may be the key to global expansion success. Start with systems you think will work, then adjust as necessary as team members provide feedback.
There is good reason to hesitate when time zones, language, and culture create gaps in a company. Such gaps can lead to distrust and a lack of loyalty. Solid systems that adjust on the fly can help bridge divides.
Insulate Your Supply Chain
The global pandemic laid bare the precarious nature of global supply chains. Although they offer companies lucrative opportunities to expand across borders, they are also extremely fallible. Events such as natural disasters, public health crises and labor issues may spur reluctance to add links to supply chains.
Of course, there will always be disruptions somewhere down the line. The trick is to figure out how you can insulate your supply chain as much as possible. That begins by knowing its status at all times so you can anticipate problems and address them immediately.
Technology that integrates data up and down the supply chain can make it far more resilient. For example, if the raw material inventory of your go-to supplier is low, you can use another one. Constant monitoring of data in real-time allows you to address a need before it becomes critical.
Don’t overlook the opportunity and value of adding new vendors and suppliers to your supply chain when expanding globally. Put processes into place to help you anticipate problems and contingency plans to pivot to when needed. A few strong links in reserve can strengthen the chain when one weak, but critical, link fails.
Hedge Currency Fluctuations
Fluctuations in global currency values are a valid reason for businesses considering global expansion to hesitate. They aren’t, however, a reason to put expansion plans on permanent hold. There are ways you can hedge your bets.
There are advantages to doing business using local currency. Not only does it make transactions easier for employees, vendors and customers, it limits your exposure to fluctuating exchange rates. Using a local bank may provide opportunities to lock in exchange rates for periodic needs to convert to your currency.
There are three types of currency risks: portfolio, structural, and transactional. Companies need to assess their risks and devise hedging plans where they can. Being accountable to shareholders will also affect risk management planning.
Whether currency fluctuations affect cash flow, the cost of major purchases or both, there are tested strategies for addressing them. Don’t forgo an opportunity to branch out just because there’s always a push and pull among currencies. You might miss out on making profits that neutralize the ebb and flow of foreign money.
Proceed With Caution … But Do Proceed
Global expansion is a huge proposition for any company. Hesitating before deciding to take the plunge is both natural and wise. It gives you an opportunity to do the extra work necessary to help ensure success if you expand your reach.
More and more companies are choosing to go global every day, so you would hardly be the first. Learn the lessons from the successes and failures of those who have gone before.