7 Factors Entrepreneurs Must Consider Before Going Global Expanding a business globally is a bold and potentially rewarding move for entrepreneurs. However, venturing into international markets comes with its own set of challenges and considerations. Here are the key factors entrepreneurs must ponder before taking the leap to go global.
- Markets and trends
- Economic factors
- Political factors
- Entity set-up requirements
- Legal barriers
- The competition
- Workforce needs
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When you decide to expand a business globally, there are some serious considerations you need to make. Even though there are big rewards from global expansion, there are also significant risks. Making this bold move as an entrepreneur means facing challenges you must be prepared for. With careful consideration of these challenges and all the factors that come into play, you could avoid making mistakes that would harm your business.
Here are the most essential factors you must plan for before leaping to take your company global.
1. Markets and trends
The market in one country may differ significantly from that in other countries. Even between close-knit areas or countries that border one another, the culture and the challenges can be unique. If you're not planning for that and are unaware, it could affect your company. You may end up without a market in your new location. It could be that the trend you're trying to get in on has already passed that area, leaving you behind the competition.
2. Economic factors
How is the economy in areas of the globe where you plan to expand? That's another consideration I suggest looking over carefully. The population in the new location may love the look of your product and what it can offer, but if they can't afford it, you won't make sales. Not only that, but even an affordable product must align with its competition based on price and features. Make sure the economy can support your decision to expand.
3. Political factors
Avoiding politics, especially with customers, is generally a good idea. Still, the fact remains that the region you're expanding into can affect whether your product is well-received or not. Just like you likely wouldn't try to sell conservative t-shirts in a heavily liberal area, you want to make sure there aren't any political factors that will affect your global expansion. Countries restricted due to their government might not be good choices for your expansion efforts. You should choose countries and areas that make your company's expansion as easy and seamless as possible.
4. Entity set-up requirements
Are you going to have to spend years and thousands of dollars just to get permission to legally operate in a particular area of the world? If so, bringing your products there may not be worth it. Set-up requirements for your business entity can take time, and there will likely be some expense, but the area's requirements should be manageable overall. There are likely other areas you can choose that won't have these issues.
5. Legal barriers
Much like politics, the legal aspects of moving your company's offerings into more global areas must be considered. For example, if you want to expand your company's online presence and ship to more countries, that's typically easier than setting up physical locations. Some countries may make it difficult for you to operate a business when you have no other legal ties. Even if you get through all the red tape, you'll be behind your competition immediately. That might not be a safe business move.
6. The competition
Concerning the competition, it also matters when considering going global as an entrepreneur. Moving into a market heavily controlled by well-established companies might not be your best option. Instead, consider areas with limited competition for your product but where there's still a market for what you're selling. Finding the right places can take time and research, but that can be time well spent when you don't have to compete as hard for customers.
7. Workforce needs
Your workforce will be important, and that's even more significant as your company grows its presence in a country or region. While many jobs can be handled online from nearly anywhere, some still have to be done in person. If your company needs a presence in a new area, you want to be sure there are enough potential workers with the skills and experience you need. Then you won't need to provide as much training and can see more growth faster.
Expanding into the global market might be the best thing you could ever do for your company, but only if handled correctly. Well-established entrepreneurs know that companies have to take that kind of expansion seriously if they're going to see success. Before becoming a global company, consider the seven factors above and ensure you're truly prepared for your business's next adventure.