A company’s website is like a door to the rest of world – business opportunities and orders can originate from anywhere. Going global is a huge opportunity for growth and if you decide to go this route it’s important to be prepared. Sooner or later, issues like language, culture, different currencies, and different legislation will need to be addressed.
Deciding whether your small business is ready to go global takes a great deal of insight into both your business and the international markets. There is no single formula that guarantees results, but there are some best practices and important considerations, which we’ll outline below.
Understand the competition
Before taking the leap it’s important to understand the competition. A business may be doing well at home, but the competition abroad might be too much to handle. Other competitors in the same line of business might work to an entirely different beat. Dedicate time to researching the competition and to figuring out how your business can provide value relative to current offerings.
Exchange rates and currency fluctuation
When expanding internationally one of the first hurdles is the problem of fluctuating exchange rates. Some expenses can suddenly cost significantly more, based on unanticipated growth.
Another issue is currency fluctuation and its impact on your profit. Unexpected currency fluctuation can either seriously dent profits or produce a windfall. For example, the relative strength of sterling against currencies in the countries you supply can make your products and services more expensive or cheaper.
Make sure you have an understand of how this will affect your business and what risk you’re willing to tolerate.
You can manage your risk through currency hedging (which, in simple terms, means entering a contract that helps you control the effects of fluctuating currencies). You may have to seek the services of a professional currency trading firm. Credit card currency conversions can also be problematic, so it is important to find a merchant account provider that provides the most advantageous currency conversions.
Understanding different business cultures
An obvious challenge to going international is dealing with the business culture in another country, as well as understanding the sales process. If it’s too different from your own culture, the business plan might need to be adjusted. So it’s important to do your research.
Scalable, flexible IT systems
From an internal perspective it is critical to invest time in preparing the company to expand. Your IT system needs to be flexible enough to grow alongside you as your business expands. It has to be scalable. The IT system will have to take into account local currencies, legislation, and languages.
As expansion consolidates across multiple sites and locations, the teams that manage the finances must be able to provide reliable information. Failure to adopt a flexible and integrated system can result in a cumbersome procedure whereby Head Office or the parent company is reliant on each site to calculate their own numbers and feed them back in the right way. It’s a waste of time and resources.