For business leaders looking to expand your business on an international level or for those who are already in the process, you may find it to be more difficult an undertaking than you had anticipated. However, the panel of seasoned and successful Vistage members Hannah Kain and Suzanne Garber and subject matter expert Balaji Krishnamurthy, graciously lent their knowledge and advice as a guide for those looking to make the overseas transition.
1. Know your business.
The first thing you should ask yourself is whether or not expanding the business internationally is the best move for your company. Know where exactly you are taking the company and why. Be very clear of why you’re going international.
Reasons to expand globally:
- To source
- To build
- To sell
Now decide what kind of business you want to become.
- International companies: are importers and exporters, but have no investment outside of their home or base country.
- Multinational companies: have investment in other countries, but do not coordinate product offerings in each country. Instead, they focus on adapting their products and services to each individual market.
- Transnational companies: have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual market.
Which of these applies to your business? Going global is not beneficial for every company. Be aware that expanding overseas is like starting a brand new company. It takes a massive amount of time, effort, and money. So, be sure it is the right move for you.
2. Do your homework.
The importance of planning ahead and doing the research before entering a new market cannot be emphasized enough. A vital step in this process is familiarizing yourself – and not just familiarizing – but intimately knowing and understanding the laws and regulations for engaging in business within the new markets. It’s significant to note that your company must abide by not only foreign laws, but by U.S. regulations as well. Case in point, the Foreign Corrupt Practices Act or FCPA, a federal law created to reduce corruption and money laundering through the global financial system. It is imperative that your company read, follow, and understand this legislation.
Prepare for risks and understand duty of care when sending people out or dealing internationally. Define in legal terms the responsibilities your company has for its employees that travel across borders and integrate them into preventative strategies that can be employed should critical situations arise. Preparation and prevention are key to risk mitigation.
3. Practice “When in Rome…”
Before conducting business internationally, assess your understanding of the local and regional nuances. Do you know the proper customs, etiquette and protocol that go along with conducting business in that country? Be aware of the differences in people, culture and markets and know how your company can align and accommodate to those things. What is essential in the U.S. may be a luxury in another market. Your business must adapt its model to each client.
Cultivate and build business relationships by connecting to the culture. If you’re not sure where to start or how to get connected, begin with resources like the U.S. Commercial Service, World Trade Centers, World Affairs Councils, and State Commissions. Do the research and acquaint yourself with the country’s history, take part in their customs, and for goodness sake, eat their food!