Last update: November 23, 2020
Success at home means the only place your business can go to expand is abroad. We have helped many companies relocate to Spain, and in our experience, these are the 5 steps a company should take to make a success of their business abroad.
This involves a huge amount of research. If you have already decided on a place. Why? Have a look at other markets and see if your investment would be better spent elsewhere. As Emanuel Lasker said:
“If you’ve found the perfect move, look for a better one”
“If you’ve found the perfect move, look for a better one”
There are a few things which off-hand should, and must be considered.
Your business lives and dies by its employees. Having an on-shore talent in your target destination will give you options in recruiting in future. In most European countries you will find an English speaking workforce that is skilled. Further afield, it might be difficult to source sufficient talent for your projects.
Politics can have both a positive and negative effect on business. Have a good look at the local news in your target territory. Recent and upcoming elections, government leaning and public opinion, a great place to look at economic health is the Economist’s Big Mac index (the perfect indicator of Purchasing Power Parity). Also find out how the government is performing, what their attitude is to offshore companies, and what their global reputation is. If there are big changes coming in a country, you should know about them.
Both technological and logistical, the infrastructure of your target destination should be researched. You may wish to open up a call center in an offshore location, so be sure that there is sufficient infrastructure for your product to be viable and that there is a stable internet. For salespeople and production teams, transport and road networks are fundamental.
Take a look at the ease of doing business index before opening your business abroad. It’s a great reference that will give you at-a-glance information on just how costly (in both time and money) your international project will be.
Business practice in foreign markets has a lot to do with social and cultural interaction, which comes down to the fine nuances of punctuality, gift-giving, and negotiating styles. Having at least one person, an intern from the area will help with conducting meetings on a local level. Part of the sales strategy should really include how to conduct interviews and how to deal and negotiate in local markets.
Weight the cost of establishing a presence and a team in a local market against the cost of acquisition. A three-year cost and revenue projection will allow you to directly compare against the immediate tickets you’ll make with an acquisition. This is the key trade-off that most businesses looking to expand abroad will face. Do you want the profit for yourself or are you willing to put your faith in a partner. There are no fixed rules on this as every situation depends only on the situation of the market and each individual business.
At Globexs we’ve helped businesses set up in Spain and we know the lay of the land, how to process administration quickly and move things along. Depending on your country of choice, you need to have expertise in place to manage local business regulation. Don’t try and wing it alone, be very understanding of how things work locally.
The first thing to do when you launch in your chosen territory is to register your business under it’s given economic practice. This could be an offshoot of your existing business or something new entirely. Again, the ease of doing business index measures the complexity of the legal systems for businesses, and of course, there is a spectrum of loopholes and legal considerations which differ in every country.
No matter how good, proactive, knowledgeable your legal team, they won’t be able to navigate the thickets of regulation in some overseas countries, we’ve seen it before. There are elevated costs when payments are made internationally, and there are also tax considerations. Having local legal expertise is essential if your business abroad is going to succeed.
Strategic advice from your local government agencies such as the Chamber of Commerce will give you key insights into doing business abroad. Their consulates are integrated into most countries and their services will provide key information on your destination from branding, to barriers, to regulation.
On a more practical note, building a list of contacts to start you off before the wheels even touch the runway is easier now than it’s ever been. Use social media strategies and set aside the budget for advertising. You can be hyper-precise about the customer you want to target. So start building your contacts before you or your team land. You may even run social media campaigns to get your team followed and in touch with key people from the country or the area. From here, the quickest thing you can do is to get in touch, prepare meetings and hit the ground running. Networking is key when opening your business abroad.
If there’s one group that is going to make it or break it, it’s HR. They will decide budget, accommodation, working hours, cover, legal expenditure and most likely the marketing budget. Your HR Director should be 100% a part of the operation.
Your international sales team need every weapon available to make a new business abroad work. Arm them with everything you’ve got, meticulously planned and budgeted for. Make your HR team aware of what is going on and what they can do to help. This can be from providing assistance to employees families, helping out with the recruitment strategy for the overseas business, all the way through to implementing re-integration programs for employees returning from a shift overseas.
Globexs is a service company for expats and international entrepreneurs. We provide the legal framework and the right infrastructure for opening your business abroad. We help you to do business successfully abroad. Our specialization is Spain. Our head office even been located in Valencia also offer relocation services in Belgium, the Netherlands and France.