Top Tips For Starting A Business Overseas
Whether you’re starting a new company overseas or looking to expand your current business, going global can be both exciting and nerve-wracking. While taking a leap of faith abroad can bring many rewards, the initial stages of starting a business overseas requires the careful navigation of a number of potential obstacles. Language, logistics, legal, administration and cultural barriers are common hurdles that need to be understood to ensure your business has a successful start. We have put together a small guide to help you get it right from the beginning.
With 196 countries throughout the world there’s obviously a large selection to choose from. The options can seem overwhelming so taking the time to conduct thorough research is imperative in ensuring that you make the right decision.
Areas to research and understand may include:
- Which country has the most overseas demand for your product or service?
- Who are the main competitors?
- Will I need to modify my product or service to adapt to an overseas market?
- What’s your unique selling point and how will you differentiate yourself in a new market?
- What are the different visa options and how long will they take to obtain?
Speaking with experts who have the necessary experience can be a great source of information and may highlight considerations that have been previously overlooked. The more familiar you are with the country’s local demographics, the easier it will be to determine your market and promote your products.
On a more practical level the World Bank Report titled Doing Business highlights the ease of doing business in every country throughout the world, taking into consideration factors that include procedure times, costs, tax rates, the quality of building regulations and even the reliability of electricity supplies.
Opening An Overseas Bank Account
Opening an overseas bank account sounds simple; the unfortunate reality is that forming a company with an overseas bank account can often be a convoluted process. Some banks will require the applicant to physically visit their premises (a significant expense for many entrepreneurs just starting out), others won’t even talk to you if your turnover is under €1 million a year.
Banking rules in the EU are not uniformed and requirements will vary from country to country. However most banks will require a detailed business plan as part of the application process so make sure you have one prepared before you start the process. There are a few fundamental elements that every successful business plan should have, these are:
- Executive and company summary
- A breakdown of start-up costs
- A detailed marketing and sales strategy
- Financial plan
Assessing & Protecting Your Brand
When conducting business globally you can’t always rely on the brand and reputation you’ve established at home. It can often take time to establish your name in a new country so consider how you’re going to get new business and how you’re going to promote your brand. What’s the best way to tell your story and are there any cultural risks for your brand being lost in translation.
A prime example was when Pepsi introduced its “Pepsi Brings You Back To Life” slogan into China. The translation has a few teething problems and their Chinese slogan read “Pepsi Brings Your Ancestors Back From The Grave”. Probably not ideal.
Another area to consider is the protection of your brand. It’s likely that after taking the time to build your company’s image, you’ll want to protect your intellectual property and legal standing of your trademark. With each country having its own laws and regulations it’s advisable to speak to an expert with experience in these matters to ensure your brand is protected overseas.
Travel is likely to be a key component of doing business abroad. While it may sound trivial getting the best travel rewards program that allows you to reinvest your frequent flier miles can really save you money on future business trips. Shop around, research and make sure you’re getting the most out of any program you sign up for. It may also be worthwhile keeping an eye on websites like Expedia Business Travel to take advantage of any deals available.
Testing The Water
If your company is set up to sell its products online, a great way to learn about your potential customer base and the relative interest overseas is to start selling your products on websites like eBay and Amazon. Although your margins may be reduced with the commission fees associated with some sites, you can learn a lot about your potential customer base by testing the water online.
Learn The Local Customs
Building rapport with potential customers and suppliers by understanding their value system are essential tools for doing business globally. Studying up on the local customs of dress, salutation, hospitality and business etiquette can help develop business relationships without accidently offending customers. Even tiny mistakes can have a negative effect, signifying a lack of manners or simply being uninformed.
For example it’s common in the US to use someone’s first name when attending a meeting, but in Germany it’s customary to use titles (Mr., Ms. or Mrs.) and surnames until told otherwise.
If you’re looking to expand and do business in an Arab country, it’s important to accept business cards with the left hand as doing so with the right would be seen as an insult.
While it can seem like a daunting task to set up your business overseas, it can be extremely rewarding. Surrounding yourself with experts and getting the right advice can make all the difference in achieving your goals. Good luck.
This post was written by company formation agent Euro Start Entreprises,-helping businesses and entrepreneurs open and expand their operations throughout the UK, Europe, US and the Emirates.