Going global: How to overcome the barriers to expand in new territories
Is international expansion on the cards for your small business? Before you think global, read this guide to avoid the common challenges that often come with overseas growth
International expansion is a logical growth opportunity for many start-ups.
But, without the right finance and IT systems to underpin new overseas offices and operations, it can be difficult to navigate local legal and regulatory regimes and easy to lose access to accurate and reliable financial information.
A global, cloud-based ERP system is one way to provide a solid foundation for international growth.
Once you've established your start-up in your home market, horizons often begin to broaden to growth opportunities in new markets overseas.
International expansion can also be an opportunity to diversify operations and to tap into new sources of talent and raw materials.
The challenges to taking your business global
While the attraction of the potential rewards of going global is obvious, there are significant and often overlooked challenges if you're a start-up entering foreign markets.
These include cultural differences, regional competitors and unfamiliar legal, tax and regulatory regimes.
Another difficulty is keeping track of the effect of currency fluctuations.
These problems can be compounded by the sometimes immature, informal and evolving structures, processes and IT and finance systems associated with a new and fast-growing business.
How to overcome the challenges to put your business on the path to international success
1. Leverage local advisors
One tried-and-tested solution is to use advisors from a local accountancy firm in the new country to help get things up and running by filing the necessary legal documents and handling basic accounts and reporting for your new office.
However, that can become unmanageable if the new country office grows to become a significant part of the business. In that scenario, if the start-up is still relying on local accountants using their own software to manage the office, the result can be an alarming lack of visibility and oversight at the corporate level.
Without accurate and reliable information on local budgets, costs, forecasts, supplies, labour and projects, how can your business establish whether the opening of an international office has been a success or failure?
2. Adopt a cloud-based ERP platform
A more solid foundation for your start-up to establish international outposts is a global, cloud-based ERP platform.
This eliminates the traditional capital investment costs typically associated with setting up new IT systems, allowing much of the investment needed to start your foreign subsidiary to be made in the form of operational expenditure.
Benefits to your business
The cloud lowers the barriers to entry in a new market. It avoids the upfront costs and delays often associated with implementing new software and servers in local data centres and enables your start-up to get up and running rapidly.
Applications are accessed via a web browser on a pay-as-you-go basis and capacity can quickly and easily be ramped up or scaled down as required.
But that’s not necessarily a ‘one-size-fits-all’ approach.
A global ERP system must be able to support local configurations within the shared system.
It’s important that it can handle multiple currencies, tax regimes and legal frameworks. And local employees may well expect to use applications in their own language, while local workflows may be required to fit with the way business is done in a particular country or region.
The most significant benefit of this approach to international expansion? By using a standardised, global and cloud-based ERP system, your business can be sure that information is handled consistently.
Data can be accessed from anywhere in the world, giving your managers the benefit of real-time insight into both company-wide and country-specific performance.
Reporting and analysis can be provided on a global basis, with reports and dashboards presenting up-to-the-minute views of how well the company is responding to challenges and opportunities, both at home and abroad.
For your start-up, this means your management teams and investors get better, timelier and more reliable information.
In this way, it’s possible to judge how your global expansion strategy is working out, providing vital opportunities to reassess or rethink that strategy, if needed.
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