5 Factors to Consider While Growing Globally
This is a guest post by Elliot Rhodes.
Growing your business to the global market is the single most important step you can ever make as a business owner or manager. I mean, globalization enables you to tap into a pool of global talents, increases your revenue tenfold, and opens up many new business opportunities. Technology and lenient international trade laws have made it easier to establish a business abroad now more than it has ever been.
But crossing borders to a foreign country isn’t the easiest thing to do. You have new cultures to think about, new languages to learn, and new government regulations to comprehend and comply with. As such, you must be prepared sufficiently before opening your first branch overseas. In this post, we focus on some of the factors that you ought to consider while growing globally.
1. Time Limitations
If you will have offices- for example- in three different countries which are in three different time zones, then you must prepare yourself to navigate around the limitations of time. You will have three sets of employees operating under different time zones as well as three different clientele bases also in different zones. Scheduling meetings and campaigns will be daunting but not entirely impossible.
2. Your Target Market
Which group of people are you targeting with your product? If you are in the tech business, opening shop in East Asia and Africa would be a great idea because those two regions are in their growing phase technologically speaking. If you are targeting the fashion niche, understanding how the millennials dress especially in the western countries would be a good thing to do.
Penetrating an international market requires you to understand what your target audience wants and what they are ready to pay for your product. If a country is populated more with higher upper-class people, then taking cheap products may be counterproductive.
How many international languages can you at least read, if not speak fluently? If you are to establish a website for your global clientele, in which language would it be? These are questions that you will have to grapple with as you try to find a balance between immediate, first sales, and sustained customer loyalty.
If you are an English speaker, you will be fairly okay communicating with your Europe-based teams, especially Western Europe, because a good population there understands the language. But people associate better with a product when it is presented to them in their native language, so you may have to learn Spanish, French, German, or others. If you are heading to Asia, then the language barrier could be bigger than you imagine.
4. Legal formalities
Tax laws vary from one country to another, the same with employees’ protection regulations. How much tax is expected of your business? How does the filing system work, and at what point do you need the services of a lawyer? Before setting base in a foreign country, you need to understand these laws, otherwise you might find yourself in trouble.
You must also understand employee privileges in that country: How many paid leaves are they entitled to? What is the minimum wage there? Which national holidays are there in the country, and which ones you must give employees the day off? All these are questions you must get answered beforehand. It is actually wiser to engage the services of a professional employer organizationin this regard.
How do business partners conduct their business with and around each other? You need to understand that before starting a business overseas. Some cultures demand certain dressing formalities for business meetings. Others, especially in Asia, do not entertain casual talks during business meetings. Lateness is an abomination in China and Malaysia. Hugging is an inappropriate business conduct in China. If you don’t understand these conditions beforehand, you may innocently scare away investors with your “inappropriate” conduct.
Cultural differences also affect your relationship with your employees. You must learn, for example, how to speak to workers who are older than you are. You must understand how to interact with employees of the opposite gender. You must understand how the chain of command operates in the country because things aren’t always identical world over.
When dealing with clients, you must understand their political and religious persuasions. Taking political stands may work for or against you depending on the regions in which you choose to operate, so it is advisable to know where to and not to ignite political or religious debates. If you are in the food industry, you may have to know which foods are welcome where and which are not.
This was a guest post by Elliot Rhodes.
Elliot Rhodes is enthusiastic about everything related to business and investing. A financial analyst and instructor, he enjoys using what he’s learned from 10 years of studying business and money to help others achieve financial stability.