If business is doing well in the UK, it’s natural that you might want to take your business overseas. You’ll have to begin the process of developing an international presence, wrapping your heard around business protocols, customs and cultures, so (as you can doubtless imagine), there are many opportunities for things to go wrong. Here are five common mistakes UK businesses make when venturing overseas so you know exactly what to avoid.
- Failing to research the market
If you’ve been operating for some time, you may feel you know your industry inside out. You know all about market trends, supply and demand, and you’re keeping a watchful eye on your competitors too. However, you won’t know all these things if you’re expanding overseas, and going in ‘blind’ could spell disaster. Ensure you invest the time necessary to explore your chosen market, conducting thorough market research and learning as much as you can ahead of launching in a foreign country.
- Not adapting the product
Another mistake a business might make is simply offering their existing product to a new market. Sometimes this will work, but very often, products need adapting to meet the requirements of the market you’re selling into. So, be prepared to come up with multiple iterations of your product, seeking feedback to see what will be well-received: adapting your product in this way could significantly increase your chance of success, as Uber found when expanding to Africa.
- Failing to put ‘boots on the ground’
When you’re expanding your business overseas, it’s tempting to keep costs as low as possible. After all, expansion is expensive enough without worrying about the cost and administrative work involved in sending someone abroad or hiring someone in your chosen location.
However, it’s a mistake to think like this. Failing to have employees on the ground could cost you dearly, so whether you hire an employee directly or use a parent company to hire them for you (a legal, efficient and cost-effective method employed by a company like this one who specialise in hiring in America), having boots on the ground means you’ll better understand the country you’re operating in.
It will give you a constant point of contact; an individual or group of people you can rely upon to give you real-time feedback and suggestions; and you’ll also build trust with your new customer base by ensuring there’s always someone to speak to who’s actually in the country.
- Not considering legal & tax issues
If you’re serious about venturing overseas, you’ll doubtless be aware of the fact that you’ve a lot to learn regarding the way in which your business is legally structured and taxed. Don’t make the mistake of winging it – instead, pay for professional, reliable advice from a tax specialist who understands the way taxation works in the UK and your chosen country overseas, ensuring you’re paying the correct amount of tax in both locations.
It’s also a good idea to seek advise from a corporate lawyer who understands the implications of registering your business overseas and the consequences of doing it incorrectly. For example, if you’re expanding into the USA, a good attorney will be able to advise you to set up as an S corporation, a C corporation or something else altogether, meaning you won’t expose your business to unnecessary liability or taxation overseas.
- Expecting results too soon
The final mistake many UK based businesses make when venturing overseas is expecting to see results too soon. Success in a foreign market requires intensive research, careful consideration and strategic planning, and therefore you’d be unwise to expect immediate results. Instead, focus on building a long-term presence instead of immediate profitability –however big or small. Overseas expansion is a test of patience and commitment, so be ready for the long-haul.