These days, it’s never been easier to expand a business internationally. Technology has made it more affordable, as well as easier to set up globally. However, that isn’t to say there aren’t significant challenges for businesses who do want to go down this route.
Here, we’ll look at five challenges entrepreneurs face when setting up an overseas business.
Understanding foreign laws and regulations
One of the biggest challenges you’ll face when setting up a business overseas, is the numerous foreign laws and regulations. Depending upon which sector you’re starting up in, there could be a lot of red tape you need to contend with. The legalities can be extremely complex, so it’s definitely worth seeking legal help from a company such as Withers Worldwide.
Cultural and language barriers
As well as the legalities, you’re going to need to familiarise yourself with cultural and language differences. One of the biggest mistakes you can make is to set up an international business without fully researching their local customs. You may need to learn the local language, or at least hire staff in the country who can translate for you.
Risks in supply chain
If you’ll be selling products, you’re going to need to set up a good supply chain. Dealing with a local supply chain can be difficult enough but an international one adds all kinds of new challenges.
It’s not just the time and cost which can become a problem, you also have missing deliveries to worry about. What would happen if a shipment of goods went missing? Having contingencies in place to deal with these kinds of issues is crucial.
Financing is one of the main challenges of setting up internationally. While technology can help to reduce the costs, it’s still going to prove pretty costly to branch out. It’s really important you understand the full costs of the expansion and that you seek financial aid such as a grant, loan or investment, if needed.
Managing an international team
Finally, another challenge you’ll need to overcome is managing an international team. Although you can communicate with the team remotely, this alone presents its own issues. You need to account for time differences, language differences and take into account international holidays. It’s certainly not impossible to manage an international team, but it is challenging!
As you can see, there are a lot of challenges entrepreneurs face when setting up a business overseas. The above is just five of the most common challenges faced and some basic advice on how to overcome them. It’s important to do as much research as possible before deciding whether international expansion is right for you.