Small and mid-sized businesses make up 98% of all businesses in the United States. They also account for a third of all exports.
It’s never been easier to go global. All you need is a website and a way to get traffic from different international markets.
Yet, so many businesses don’t get international expansion right. It’s often seen as a huge costly risk that could impact other parts of the business.
There are several strategies for global expansion that you can use to make the most of the new markets. If you’re thinking about business expansion into international markets, you’ll want to keep reading.
These are the main international business strategies that you can leverage to go global.
1. Know the Legal Landscape
The first strategy is to gain as much knowledge as you can about global business expansion. If you think that doing business across the country is crazy because of different state and federal laws, wait until you go global.
Each country has its own set of labor, import, and tax laws. All of these things impact the way you do business. Add a layer of Brexit on top, and you have a complicated mess.
Even as a solopreneur, you think that it’s simple to become a digital nomad and expand your business. It’s not that simple.
You’re still responsible for filing taxes in the United States. Depending on where you go, you might be responsible for self-employment taxes.
The more you know about doing business abroad, the better. You might have to register the business in each country and pay corporate taxes.
2. Outsource Parts of the Business
Most countries require businesses to register in that country in order to operate. That becomes a costly process because they also ask for an initial startup investment.
Companies already exist to help you manage setting up a business entity. You could outsource business development to test your idea in the new marketplace.
You can also use an international professional employee organization (PEO) to recruit employees, set up your business, and ensure your company complies with local regulations. This page tells you how PEOs work in international business.
3. Go Completely Global
Do you have one set of products that can sell anywhere in the world? Apple has that with its line of products.
There are minor tweaks for keyboards, electrical outlets, and software. The hardware itself is the same in Spain as it is in the United States.
Take a look at Apple’s website and how it structures itself for international markets. The Apple brand is front and center, which is why you still go to apple.com.
International markets are shown after the URL. If you want to visit the German store, just type apple.com/de.
4. International Strategy
An international strategy is where a lot of businesses start their global expansion. You see this with certain goods and services.
A company like Porsche has its headquarters in Germany. Orders for cars get placed in showrooms around the world. Cars get manufactured in Germany and shipped to their destination.
This applies to customized cars like the 911. You choose your specs, it gets crafted, and shipped to you.
How can this apply to small businesses? Wineries, food suppliers, and unique goods makers can benefit from this strategy.
5. Parent Company Strategy
Some brands choose to have a parent company govern the entire operation, with brands underneath the parent company. You might not know Proctor and Gamble, but you know the company’s brands.
Gillette, Tide, Fairy, Pantene, and Head and Shoulders are just a few of the brands under the Proctor and Gamble umbrella.
This strategy gives you a lot of flexibility because you can create new brands for specific markets. Another option is to have each brand serve as a multinational brand.
Head and Shoulders is a multinational brand you can buy in Italy, the United States, and anywhere in the world.
6. Transnational Strategy
A transnational strategy is one of the more traditional ways to have an international business. It’s similar to an international strategy in that there’s a company headquarters.
The difference is how companies maintain a presence in other markets. Transnational companies register in other markets as separate entities.
Amazon, McDonald’s, Nike, and financial institutions like Santander operate this way. It keeps the legalities of running an international business cut and dried.
From a consumer standpoint, it can be confusing. They might not understand why a gift card purchased in the United States won’t work in other markets.
The international strategy gives companies a chance to localize their brands. It’s what McDonald’s does with its products. There are always a few menu items that are tailored specifically for each market.
7. Anticipate Problems
If something can go wrong with global expansion, it probably will. We mentioned that you should learn as much as you can about the legal issues that arise from international business expansion.
Becoming an international business isn’t a short-term way to grow revenue. It’s a long-term expansion strategy.
Take the time to assess all of the risks to your business. Try to anticipate problems before they arise. Have a plan in place to respond to them.
If you react to those problems, you’ll end up making them worse by panicking.
Working With Strategies for Global Expansion
If you saturated the marketplace with your brand, it might be time to become an international business. There are many strategies for global expansion that you can use.
You can keep it simple and outsource components of your business to facilitate operations. You can set up separate entities in other countries.
No matter what you choose, be sure to carefully research the market and understand the legal landscape.
For more business insights, be sure to visit the blog today!