So, the figures of your company’s year-on-year performance are in and the future is looking bright. In the previous 12 months, you’ve welcomed new clients and contracts, taken on additional members of staff and created new in-house departments, but what now?
For any venture, the decision to aim for a significantly bigger market through overseas expansion isn’t an easy one to make, and such a move wouldn’t come without considerable risks. However, if the potential rewards seem to outweigh the possible hazards, here are three routes that you can take to tap into a foreign market and become a multinational success story:
A foreign branch
Perhaps the simplest way to expand abroad, opening a new branch involves obtaining all the necessary business licenses, outsourcing to a localisation team and ensuring you have the capital available to adequately fund the project.
Of course, you’d need to make sure that there is a big enough demand for your product or service in a given region, or that the area chosen would otherwise offer some form of geographical advantage; perhaps in terms of economic strength or connections to transport infrastructure.
Capital cities are a good choice, but not always; often, prices and competition are both higher.
Acquisitions
Acquiring an existing business is usually an easier, more preferable option to setting up a whole new branch. Certain factors – such as the need to market your brand and localise, attract a client pool, and train new staff – are negated, since by making a business your subsidiary, you’re effectively taking on an established team and a recognised brand (provided that you’ve chosen wisely).
However, the downside to an acquisition is that it would, in all likelihood, require your company to be considerably more cash rich than if you were simply establishing a new branch.
Becoming a franchise
Although a similar move to setting up new branches, heading into franchising waters is a somewhat bigger step. However, franchising is relatively cheap, as many of the usual costs associated with expansion are avoided; by giving foreign affiliates a license to trade under your brand name and image, you’re handing out ownership of the overseas branch in return for a portion of the profits made.
One risk with this, however, is the diminished control over the management of your brand image; if something goes wrong with the overseas franchise, your own company back home could be negatively affected.
All that said, if you’re not yet in a position to consider global expansion, set your business straight by considering financial outsourcing; established professionals in the field will be able to direct your company towards the funding necessary for growth.