With globalization, many investors are not just looking for opportunities in their home countries but also in the global market. These investors are driven by the desire to maximize earning potential by opening businesses abroad. Though good managerial skills are as important in the global business arena, investors should follow a few steps when starting their businesses abroad.
Before going abroad to find opportunities, contact the Department of Commerce.
They can offer useful advice on what is involved in starting a business abroad. The department offers advice on various issues ranging from taxation and currency exchange to hiring overseas.
Obtain the needed visa and work permits.
There are different types of these documents and the rules for application and obtaining them vary in each country. Investors should contact the department that deals with foreign affairs in the country where they intend to invest.
Visit the country abroad.
Before moving abroad for business, it is important to visit the country to familiarize with the culture, weather and other social issues. While in the country, find out how competitive the market is and learn the language. This will greatly facilitate the management process.
Study the target market and find out if there is a market for the product or service.
Unlike the U.S, consumers in some countries do not buy goods in bulk. This means that small items will sell more in such markets than large quantities.
Establish daily operations including the days and hours when the business will operate.
In some countries, businesses close on certain times of the day for religious or cultural reasons. Know about such practices in the foreign country and find ways of accommodating their religious or cultural practices to the business schedule.
Find an agent in the country abroad.
The right overseas agent should have strong relationships with local business owners and be able to contact potential employees and customers. Overseas agents play a significant role because they act as intermediaries between customers and foreign managers and are in most cases, trusted members of the community.
Learn the country’s customs and work habits.
To succeed with the business, it is important to fit in with locals to avoid miss communications and build good relationships with locals. Employees will also like business owners who take the effort of learning the local language instead of enforcing their habits on the local employees.
Conducting a business overseas involves the proactive management of various issues.
There are many risks associated with international business that may stem from the country’s political, social, legal or economic environment. Knowing how to manage risks in an overseas business can help make it more profitable.
Undertake credit risk management to lay the groundwork for effective cash management.
This helps a company reduce its debt pile with time. This financial practice also helps overseas businesses select the right partners that will help it have a competitive edge. The partners can be vendors, contractors, customers and lenders. Effective risk mitigation measures are critical in the success of a business overseas.
Casey Haslem is a 25 year old writer. Her hobbies are reading, painting and pretending she knows how to write a book (she doesn’t). Writing opens up a whole world of new ideas and possibilities for her.
Image Credit: Shutterstock.comSuscribe to the podcast