Lots of British businesses operate internationally in one way or another, and there are plenty of advantages to doing this. From the opportunities that it poses for discovering new clients to the way that it allows firms to tap into global talent pools, the reasons are clear. However, it also poses challenges – especially to a firm’s finances. Finding the right exchange rate is one issue, while relative lack of knowledge around how local markets work is another. Here, then, are some top tips for those looking to take their business global.
By far the most challenging aspect of running a business abroad is the exchange rate. Getting money into a country is essential in order to start up your enterprise there, but the value of it here in Britain could be much higher than the value in its destination. The same goes for extracting profits: you may make a lot in the foreign country, but the profit could be almost wiped out once you convert it back into pounds. The best international money transfer deals are usually found on online price comparison websites, so it’s worth investigating these. You can also look into locking cash away in a local bank account in the foreign country and then keeping it there strategically until the exchange rate is beneficial to you.
All businesses rely on supply chains in order to function – and from office space to kitchen equipment, it’s likely that your business will need at least one local supplier. At home, you’d be able to find out from your networks exactly which supplier was the best quality and which was the most cost-effective. Abroad, though, you may be grasping in the dark. Having your team members on the ground join a local English-speaking business circle or chamber of commerce may well be a good move, as they can help you navigate this sort of pitfall and work out what the norms are.
Providing your global business is a success, you’ll probably want to try to expand – and this requires investment. Each country has its own investment scene, and the rules on how to navigate this scene can differ based on everything from the regulatory burdens placed on investors to the local cultural customs. In China, for example, there are outright or partial bans on international cash going to almost 50 sectors – so you may need to do your homework or even employ someone to work it out for you. If you don’t, then you may find yourself coming up against investment protectionism and wasting time on leads that go nowhere.
Taking a business abroad is something that many entrepreneurs and business leaders dream of doing, but the financial reality of making the move often renders it pointless. Overcoming challenges such as exchange rates and investment bottlenecks is possible though. All it takes is a bit of research and perseverance and you’ll eventually get there.