Deciding to globally extend your business could be rewarding, but it also comes with significant risk. The fact that you are thinking about expansion is a sign that your business is doing well. Before you decide to pursue your plan, you need to understand the possible risks. These are some of the things that could happen in your efforts to go global.
If you struggled with the initial costs when you started the business back home, you could expect things to be way more expensive as you go international. You need to pay a ridiculous amount of money for taxes and construction. You also need to follow a different pay scheme for the employees. There is no guarantee that your business will be profitable, but you will have to spend a considerable amount anyway.
If you are taking your business to a country where English is not common, there could be a significant language barrier for you to face. Communicating with the local team might be difficult at first. You will also need to translate everything to reach the target market.
If language is already a problem, it might be even worse if you factor in cultural differences. You need to be sensitive to what the locals need. You also need to understand their cultural practices and religious beliefs.
For instance, international brands that have succeeded in many countries like Starbucks still did not do well in Italy. The country has a stable coffee industry, and they do not need a foreign company telling them what coffee to drink. Dunkin Donuts also struggled in India because the company branded itself as a breakfast option when most Indians do not consider these sweet treats as suitable for breakfast. You cannot apply the same strategy that you use back home when you start entering a new target market.
Laws and regulations
These issues could be the most significant barriers to your success. Some countries might impose heavy taxes since you are a foreign company, on top of the taxes you will pay back home because you decided to move your company elsewhere. Quality control standards might also differ from one country to another. The worst part is when you violate these laws. You could end up with excessive fines that could potentially bring your entire business down.
If you take your business to countries that are quite risky due to the safety problems the locals face, you are also putting your entire team at risk. You do not want them to end up dying in a foreign land because you did not thoroughly assess the suitability of the country for a business like yours.
To avoid all these risks, you can partner with A2 Global Security Risk Management. They will help you analyse what you need to do before you decide to expand your business. Yes, there could be a vast market out there, but if you do not prepare well, your business could be in trouble. Even your reputation back home might be on the line.