International Business: 4 Tips for Going Global
by Erica Nelson on January 08, 2015
With each passing year, the world becomes a slightly smaller place, an interconnected “global village” in which borders and distance are growing increasingly irrelevant. With seemingly boundless opportunities available in emerging markets such as Brazil, India, and China, international business expansion has almost become a necessity in the modern global economy. While the potential for growth is exciting and the pressure to compete is sizable, globalizing your enterprise is a formidable task with no shortage of risk and complexities. At D&S, developing global business solutions for our clients is our work and our passion. In this post, we’d like to share with you four strategies for preparing your business for the international market:
Assess and plan
When deciding to bring your business to the international stage, take the time to assess your current status and determine whether your company is properly positioned to make the global leap. Before embarking on expansion, create an international business plan to define your company’s present situation, its internal goals, and its expected results. Networking with experienced industry contacts or partnering with an established global solutions provider can help evaluate your business’s position and plan for its international future. Time, patience, and commitment are crucial to building a global enterprise, and every employee, partner, and resource should be fully prepared for the long haul.
Globalization is an expensive process, and conducting business internationally brings with it a laundry list of new costs. From travel and customs expenses to cash flow issues in dealing with debtors a world away, your business must be able to cope with the initial capital investment and the long-term implications of global expansion. Consider the process an almost startup-like period, be prepared to lose money initially, and be ready to update your financial plan to reflect actual revenue and expenses as you enter the new market.
Understand the legal and regulatory landscape
Once you’re confident in your financial stability and long-term plan, you should consider the unique legal and regulatory hurdles you may encounter within the markets you hope to do business. Every country has its own complex web of laws and procedures with which your company must be familiar and current. Your business and its counsel needs to understand tax and customs laws, import restrictions, corporate structures, and theories of agency and liability for every nation you plan to collaborate with. You’ll also need to negotiate the forum and governing law for any potential disputes, which is no small feat considering the inconvenience and expense involved in international dispute resolution. Domestic laws must also be considered as there may be possible issues involving your own country’s labor, customs, and tax law.
The government of the country you hope to deal with may not be particularly receptive to foreign investment or expansion, and you can find yourself buried beneath an avalanche of red tape if you’re not adequately prepared. By investigating the country’s history with respect to expropriation, government restrictions, limitations on currency repatriation, and other key patterns, you will be better situated to determine whether the cost of expansion into a particular market is worth the potential benefits.
Consider cultural complications
Beyond the myriad minutia of foreign law and procedure, there are less clear-cut considerations to take into account when conducting international business, the most obvious of which is the language barrier. Although English is still the second most spoken language in the world, it is by no means ubiquitous in emerging market countries, and your company should be prepared to conduct business with any tongue it’s likely to encounter. While technology has made translation a much simpler task in recent years, certain concepts and phrases may not “translate well” due to the diverse etymological and cultural origins of languages around the globe. In situations like this, an experienced translator can help you convey your message clearly and effectively.
On a deeper level, successful global business requires a respect for the vast array of cultural norms and traditions that exist across the world. Your target country may have very different standards for negotiations, humor, and even subtle gestures, and you may be expected to adhere to nuanced, unfamiliar business traditions. For example, in Argentina a kiss on the check can be more appropriate than a handshake in certain situations. Brazilian business negotiations tend to be emotional and enthusiastic, with copious eye contact and use of body language. In Japan, where society is governed by strict, regimented notions of etiquette, it’s considered impolite to say “no” directly and without a prefacing apology.
You don’t have to embark alone (and you shouldn’t)
Successfully globalizing your business involves expense, effort, and education. It’s a challenging process that is not without risk, but the potential reward is nearly limitless. In a world of interconnected economies, going global means more revenue, prestige, and a crucial competitive advantage. As a financial services provider, a partner like D&S Global Solutions can ease your transition to the international market. Utilizing D&S’s rich global network, customized solutions, and world-renowned international expertise, your business will be more than prepared to maximize its potential in the global marketplace.