As you start out a business and trying for an international expansion, there are a lot of things to think about. You will need to know what kind of business you have, who your customers are, how fast you want to grow, how much time and money you are willing to spend, and, perhaps most importantly, which country or countries you want to grow into.
In a previous article, Zap Inventory talked about how there are a lot of things to do if you want to grow your business internationally by using some killer descriptions. You can make the process easier by putting in place some key building blocks.
Here are the top 5 challenges to be discussed here –
Language and Cultural barriers –
If you do not speak the same language as your customers, it should go without saying that communication will be hard; as for an international expansion, you need to overcome the language barrier. You can run your product descriptions through Google Translate, which is a great tool in some situations, but we would not recommend relying on it alone to represent your company in a new country. We suggest that at least one person on your team should be able to speak the local language. Obviously, this makes it more appealing for Australian and New Zealand companies to expand into Anglophone countries like the US, UK, and Canada.
Of course, you should also think about how language varies from place to place. If an Australian company wants to sell thongs in the UK, they should call them flip-flops instead of thongs because the word “thong” means something completely different there. If there is that much confusion between two countries that speak the same language, imagine how hard it would be to expand into a country where the language and culture are very different. You will also need to understand that different countries work at different speeds. Your company needs to know how to work with and compete with the infrastructure in the country you want to do business in. In some countries, customers expect to get their orders the next day and to be able to reach customer service at any time. If your business can not do this, you risk turning off your customers.
Local Competition –
If you are making a lot of money selling hand-made knives in Australia, you might think you can just bring that business model to the UK in order to have an international expansion for your business. But what if another company also sells handcrafted knives? One with headquarters in the UK?
Well, that might put you at a disadvantage right from the start. You will have to deal with import fees and tariffs, possible longer turnaround times, and the problem of having to deal with two currencies while your British counterpart can just work in pounds sterling. You will need to be careful and pay close attention to what your competitors are doing to make up for the things they do better than you.
Tax Codes and Compliance Issues –
Even if you only do business in one country, taxes can be a pain to deal with. When it comes to international trade, taxes, fees, and tariffs can be a big problem for many companies, especially smaller ones. You also need to know about business rules and standards. If you do not follow the rules in a country you are trying to expand into, your plans to grow could be stopped, and you could have to pay more in your home country.
Supply Chain Risks –
Large businesses have departments that handle imports, exports, shipping, and logistics. Because it can be hard to keep track of a supply chain that goes across national borders. If you want to ship goods from the APAC region to either Europe or the United States, you will have to deal with the distance. But shipping costs and the time it takes are not the only problems. What if a container ship full of your goods is late by a week or does not show up at all? What happens if customs seize your goods? All of these things can go wrong when you trade internationally. To avoid them, you will need to know how things work and make your international expansion thing an easy task.
Operational Risk with hiring Staff –
Working in another country will put more stress on your business, so you will need to hire more people to help. You might even need to hire people in the new country to help you out. The details vary from country to country and from business to business. But hiring more people is always a risk, no matter what your situation is. Not only will your costs go up, but you will also have to put your trust in new people, some of whom you might never meet in person. That is why international expansion is not a cakewalk for a company; it needs a lot more things to consider.
So, these were the top five challenges you might face while having your company’s international expansion. To learn more about such facts and figures, visit zap inventory and understand in detail.