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Managing international business risks

Managing international business risks

Taking your success overseas can be tempting as your business expands beyond the boundaries of home, but you need to ensure you have risk-management measures in place and understand the local best practices and customs before you take the plunge. Here’s a checklist of items to consider when you’re looking to expand internationally.

Know your market

Before you go ahead with international expansion, it’s prudent to study your intended destination thoroughly – its taxation code and other bureaucratic restrictions, its laws relating to advertising, its cultural norms and anything else that could potentially affect your business and its ability to operate successfully. For example, will you be allowed to own the business in its entirety or does the larger share have to go to a local partner? Regulations will vary widely from country to country – and even state to state – so it’s important to get professional advice from someone who is familiar with the area you’re interested in expanding to.

Are you the right fit?

Do you like to travel? Do you enjoy different cultures? If the answer to these questions is yes, then you have a better chance of fitting in and making your international operation a success. Knowledge of English is good enough for most countries, but if you already have another language or two under your belt, that’s a definite bonus.

Manage your goals and expectations

It can take a lot of money to grow a business, especially when taking it overseas, so don’t be surprised if you are operating at a loss for the first few months. Budget conservatively and make sure that your home branch is in a healthy financial position. If, after exhaustive research of your intended destination, you are still hesitant about making a large investment right away, you can start small – with targeted social media advertising, for example – to test local market demand for your product or service.

Don’t forget home business needs

In the midst of all the excitement around an international expansion, it’s easy to forget that you still have local customers and a local business environment that continues to present threats as well as opportunities. Don’t let your home business get stagnant, or worse, take a nosedive because you were no longer at the wheel 24/7. If you are required to leave your post for extended periods while you expand, put a trusted partner in charge and check in regularly.

Stay safe

Finally, complete a personal risk assessment: make sure you’re expanding into a country that is stable. You don’t want to be trying to build your business in the middle of a conflict, so keep close tabs on the news and check the Government’s Smartraveller website, which is updated regularly.

International expansion can seem like a daunting idea to many small-business owners, but if planned thoroughly and well in advance, it can be extremely rewarding – both financially and personally.

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