In today’s globalized society, it is no longer just the large, established companies that feel that domestic markets are shrinking in size. On the contrary, looking for new foreign markets to start or expand a business is something that is becoming increasingly important for many small and medium-sized companies and young entrepreneurs.
The limits for trade and investment across land borders are being erased. The barriers that previously existed in languages, time zones, politics, and culture, disappear due to technological development. More people are choosing to start their business in other countries to take advantage of all the opportunities that the new market offers.
New markets mean new challenges which many businessmen might be facing for the first time and there is a lot to think about to get it right. Certain legal paperwork, forms, and documents need to be filled out, submitted, and processed, many of which, especially if going to an English-speaking country, require professional and proper certified translation for visa and immigration purposes.
This dream of many entrepreneurs can become a reality if the right preparation and organization are not underestimated. In this article, we share some essential tips for starting a new business in a foreign country.
Business Concept
Often the business concept is what requires the most thought of all the preparatory steps when wanting to start a business abroad. Especially if your plans are more grandiose.
But whether you are planning to go big with your business idea or start small, there is a universal truth that applies to all companies. You simply must think through your business concept.
The business concept is about what to sell, how to sell and to whom. It must also highlight the company’s strengths and what makes the company special.
With a well-thought-out business idea, your chances of success increase. Write down your ideas so you can develop them and see if your ideas are sustainable.
Choose the Right Market
The first thing companies should keep in mind when it comes to establishing themselves abroad is location. Solid preparation is necessary to find the market that will suit you and your business.
The company must think about which place is the best for their particular type of business, they must think about where this company can be developed and improved.
Different companies have different requirements, wishes, and needs, and in different places, the needs and demand vary.
Finding the right place does not have to mean that the company only has to decide the right country, but it is also about choosing the right city. If it is a large country, for example, needs and demand may look different in various parts of the country.
Conduct your market research and inform yourself thoroughly. Think about which country will be best for you in terms of its exchange rates, culture, delivery times, shipping costs, competing businesses, volume requirements that you have, and quality that you can be offered.
A good tip is also to find a market that is similar to the one in your home country as you can similarly begin your operations as it increases chances that things will go smoothly, at least in the beginning.
Laws and Regulations
Review the laws and regulations that apply in the country you have chosen. Can the business be run in the same way as in your home country or is much more required? This applies to all different aspects of the company, from the day-to-day operations to the employment of staff.
Another thing to consider are taxes in the country. Is it cheaper or more expensive with in-house staff? How do medical care and sick leave work? What about corporate tax in the event of a profit? You should ask yourself all of these questions and find information to get things up and running.
The tax rules are something a company needs to check before starting its business in a foreign country. Regulations are different in different countries and considering this, they may look completely different than what you are used to. VAT and customs may also differ, and it is also something to think about and look into more carefully.
Financial Planning
The most important step in planning finances. What will it cost to establish your business? Will there be additional costs that do not exist in the country of origin or will it even be cheaper than operating in the home country?
Be sure to take into account everything, particularly in the start-up phase. Other major costs that are added at the start are expenses for recruitment and design of office space.
An adventure like this requires a lot of money, partly because it will cost a lot to set things up, and advance payment is usually something of a rule. You will also be happy to have an extra buffer in case something wrong or unexpected happens.
Make Contacts and Learn About the Business Culture
Another important tip towards starting a business successfully abroad is to start building a network of partners and suppliers in the new country. An international network is a success factor for a successful start-up and expansion.
It can therefore be a good idea to hire or collaborate with someone who knows the market you are going to establish yourself in. That person can in turn help you make contacts with potential partners and various suppliers.
Everyone who has a company that expands abroad knows that it is the relationships you have that make the biggest difference. Therefore, make sure to bond and create strong relationships that give you security.
If you move to a new country and show an interest in learning the business culture and try to speak their language, you will be much better received and have a great advantage with you.
Learning a few but well-chosen phrases to use will work wonders and it creates a sense of trust while also reducing the gap between you and the new culture.
Final Thoughts
It is no easy feat to decide to go to a foreign country and start a new business.
The first thing and the most important one is to believe in your business idea, work on it effortlessly and develop it and do your research as to which market would be best suitable for its successful realization.
Although it may be a tedious process, you must compile your paperwork and organize your documents as it is crucial when applying for a visa and other immigration permits.
Despite reading up on the laws and regulations, drafting your budget and business plan, be sure to dive into the country’s business culture and show a genuine interest in meeting new people and expanding your network of friends and collaborators which will turn into long-lasting professional and personal relationships.
This journey might be demanding and challenging at times but it will surely make you develop a thick skin and reach your business goals.
Sasha Douglass
