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International expansion is an end goal for a lot of business owners but only a small number manage to reach it. The reduced costs of manufacturing products, not to mention the new markets available overseas are attractive to business owners that want to expand their operation and increase their revenue. But international expansion is often easier said than done. While it does offer the chance to break into new markets, taking a business overseas requires a lot of work and many business owners make mistakes along the way that prove fatal to their entire business.




Reasons For Expansion

Perhaps the biggest trap that business owners fall into is expanding for the wrong reasons. Companies that move overseas because there is little to no growth in their markets at home are setting themselves up for failure. In some cases, there may be viable markets in other countries that you can expand into. But more often than not, if the markets are slowing down at home then they’ll be slowing down elsewhere too. Companies that use international expansion as an attempt to kickstart their business are destined to fail.

It’s the companies that are looking for ways to build on an already successful market by expanding into different countries that are likely to make it. When you have a lot of revenue coming in already, you can afford to start expanding abroad gradually, reducing the risks involved. That’s a far safer option than trying to save a failing business by moving your entire operation abroad.

Upscaling Manufacturing

If there are new markets to be found, upscaling your manufacturing operation is vital so you can meet the demand of your new international markets. This is where a lot of business owners go wrong and end up failing. When you start making some sales, you’ll only have a short window to capitalize on that initial success if you’re going to cement yourself as a market leader. That’s why meeting demand is so important at this early stage. Business owners that try to manage the moving and updating of their warehouses and manufacturing operation without professional advice are going to struggle with their expansion. Companies like A1 Precision Solutions are experts in warehouse services and they can help businesses streamline the move overseas and ensure that they’re properly equipped to manufacture enough products to meet demand in new markets.

Hiring Employees

There’s no chance of running a successful operation abroad without good people to head it up. Not being able to find those people is another common reason that people fail to expand their business overseas and sustain it. Finding skilled employees is essential in businesses anyway, but it’s especially important when you’re expanding internationally. Whoever is in charge of the new operation is representing your company and, while you will have a lot of input while things are being set up, they’ll be making the day to day decisions in future.

Operating Costs

The reduced running costs in other countries are a big bonus for business owners. It’s common practice for people to outsource areas of their business, usually manufacturing and customer support, to countries where it’s cheaper. That’s given rise to the myth that it’s always going to be cheap to expand your business overseas. In reality, it all depends on which country you’re moving into. That’s why research is such an important step. Businesses that expand into new countries without preparing themselves for the increased running costs usually tend to fail quite quickly.

Regulations

All business owners will tell you that the rules and regulations involved with running your own company are one of the worst parts of their job. Breaching any of those rules can cause a lot of problems for businesses and often result in fines. When they’re first starting out, business owners have to learn all of those rules and regulations and if they decide to expand their business overseas, they have to go through it all over again. Hiring the right people will help to some extent here, especially if they’ve got experience running a business in that country. It’s also important that business owners seek legal advice from lawyers residing in the country that they want to expand into. It’s the best way to make sure that everything is above board.

Global expansion is the final aim of most business owners but before they manage it, they need to overcome a lot of hurdles. If businesses are making any of these mistakes, their plan for overseas expansion won’t be a success.