Alison Coleman, whose work can be found on Forbes.com, and in The Times, Sunday Times, economia, The Guardian, Employee Benefits and Hays Journal, has written a piece for us on four barriers to overseas business growth and how to beat them.
Expanding abroad can of course be an effective way of growing a business. Whether that means establishing an international presence or forging solid trade relations, foreign markets mean fresh opportunities, new customers and new revenue streams, whilst minimising the risks of being too reliant on a single market. Attracted by the benefits of pursuing overseas growth, many firms are deterred by the barriers before they even start, but like all business challenges, they can be overcome.
Be culturally canny
Every overseas market has its own cultural quirks, and the UK is certainly no exception. Often quite subtle they are easy to miss, which can impact your expansion plans at an early stage. If you’re from or used to working in the US, for example, you will be used to your presentations winning positive feedback from companies, but not amounting to much in terms of closing a deal. On the other hand, firms in the UK and many parts of Europe expect business presenters to earn their praise, so positive feedback from prospective clients in those markets carries more value as an intention to do business.
This is simply about doing your research on the market and its culture, for example, understanding buying decisions and how the negotiation process works, and tailoring your approach accordingly. Showing that you understand the differences in local business culture will go a long way to ensuring success in the UK and any other international destinations.
One issue that businesses expanding into foreign markets can’t avoid is currency exchange and the rate fluctuations that make it difficult for them to forecast future costs and revenues. The recent Brexit vote is a case in point, triggering a sharp fall in the value of sterling, changing the fortunes of UK importers and exporters almost overnight.
Some firms overcome this barrier by opening a bank account in the relevant currency, either in their domestic or target market, depending on the banking costs and available services of each, thereby avoiding the need for currency conversion.
Hedging is another option favoured by more and more firms looking to gain a foothold overseas and includes the use of forward contracts to buy or sell currency at a predetermined exchange rate. This protects the business from exchange rate volatility, however it also excludes it from any financial gains arising from favourable rate moves.
Learn about the lingo
The biggest international business deal can easily be lost in translation; in fact for many companies, language differences present the biggest barriers to their overseas growth plans.
Problems are often the result of businesses failing to consider how the semantics behind their brand values translates, rather than word for word translation. Humour is a case in point. A witty marketing strapline that scores a hit with domestic customers can fall flat elsewhere because the humour doesn’t translate into something that is funny to a foreign audience.
Get expert help. If your business is going into a new market you will want to ensure that your written materials are accurate and have been given a culturally relevant brand translation.
Unravel the red tape
Impossible to avoid and easy to trip over, cross border regulations, such as, taxation, safety standards, packaging and labelling, and employment, vary enormously, but with the right resources in place, they can be successfully negotiated. Understanding the legal framework of your target market is essential, and engaging the services of a good local lawyer, ideally a specialist in your industry sector or in a specific business function, for example, setting up an overseas warehouse, will ensure that you are compliant with the laws relevant to your business. It costs money to get the legalities right, but not as much as getting them wrong.
Expanding overseas creates a bigger global footprint and greater brand recognition for your business that can be a catalyst for further global expansion – London’s position on the world stage and the fact that it is a significant cultural melting pot make it such a popular ‘first port of call’ for international expansion – in the eyes of your domestic customers and partners, makes you a bigger player in your industry.
About the author
Alison Coleman is a freelance editor and writer working with the national and international press and leading periodicals, with a special interest in entrepreneurs, start-ups, exports, finance, and executive education. See www.alisoncoleman.co.uk and www.forbes.com/sites/alisoncoleman