A lot of people are eager to start an international business, without actually realizing all the challenges that this course of action entails. All they focus on are the positive sides like expanding to new markets, an access to a greater talent pool and prospects of future, even greater, expansion. Still, things are not nearly as easy as they may appear at first and here are a couple of downsides you might encounter.
The issue with company structure
In most English-speaking countries like the United States, Canada, the United Kingdom and Australia, businesses are classified as a sole entrepreneurship, a partnership or a limited liability corporation. Needless to say, this affects how the company is registered but even more importantly, how it pays taxes. The problem with this issue lies in the fact that the target market you are attempting to approach may not have the same standard structures, which might cause a lot of problems.
Aside from this, your company needs to prepare its international structure. This entails making decisions on whether you run your company from a single headquarters or do you have autonomous offices and representatives all over the place. Needless to say, this also depends on how much autonomy you are willing to hand over to these overseas branches.
Another thing you need to take into consideration is how cultural differences will affect your brand. For instance, opening a Hooters Bar and Grill branch in Saudi Arabia is definitely not a good idea. Still, not every such consideration is as straightforward as this comparison. Sometimes, these differences will be much subtler, yet this doesn’t make them any less devastating for your brand. For this reason alone, it might be a much better idea to use a platform such as 2 Easy in order to get some invaluable local contacts at your target location. These B2B connections might help you out establish your international office with much greater efficiency.
Local laws and regulations
Next, you should look out for local laws and regulations and the ways in which they match or differ from those from your country of origin. Sometimes, your business structure or model will be tailored to fit the needs of a local market, which could make your transition to an offshore location slightly more difficult. Sure, dealing with two separate locations can be hard but things will only escalate once you start taking more and more countries into your calculation. This is definitely something you have to think about in due time.
One of the most controversial issues surrounding the global market is the fact that the price of the same product/service may differ depending on the target location. Now, different parts of the world have different average purchasing power, which means that stamping a single universal price on your product may restrict you in more ways than you can imagine. On the one hand, it could make your product too expensive for the local market or it could significantly lower the bar for your expected profit. The method of guiding your pricing strategy is probably going by the Big Mac Index when comparing the purchasing powers of different regions.
Issues surrounding marketing
Finally, due to the above-mentioned cultural differences, you might have a hard time using your marketing campaign all over the globe. Seeing as how the situation in the world is quite sensitive from the cultural standpoint, even some of the most innocent trends might appear quite offensive in some regions. Because of this, it is usually far better to come up with different variations for one and the same campaign than to try going with a one-size-fits-all solution. On the other hand, this might considerably increase your expenses.
At the end of the day, starting a global brand is far from easy, seeing as how the number of variables you have to keep an eye on drastically increases. Instead of having to worry about the legal issues of your home region, you now have to do this several times over. Furthermore, any reform you decide to enact suddenly gets layers and layers of potential complications. Nonetheless, for all those who don’t fear the challenge of overcoming these international barriers, potential rewards are always more than worth it.