3 Blunders Businesses Make When Going International (And How to Avoid Them)
When a company is considering international expansion, there are a number of details to consider: what type of entity to set up, how to hire employees, what taxes need to be filed, etc. Though the details may vary depending on country and company specific circumstances, there are three common mistakes that businesses headed overseas make that can be easily avoided:
- Assuming finance and HR practices are consistent. If you think you can simply use the same offer letters and employee contracts you use in the U.S. when hiring overseas, think again. Nearly everything—opening a bank account, paying staff, issuing stock options, filing taxes, setting up insurance and other benefits—differs on a country to country basis. Anticipate that there will be many differences and prepare to encounter practices that may not be familiar.
- Standardizing products and services. The one-size-fits-all mentality doesn’t apply in a global marketplace. What works in the U.S. market may not make sense in China—your marketing tactics, sales strategy, even your actual products may have to change completely to fit local expectations and preferences. Being sensitive to regional needs tends to be more successful for expanding companies than employing a blanket approach worldwide.
- Not getting help. Many companies opt to expand overseas for the first time on their own. Though this approach may seem low cost, it’s high risk—you don’t know what you don’t know, and with the myriad of administrative and compliance issues involved in setting up international operations, the possibility for error is significant. Working with an international business software and services provider that can handle the details and connect you with the right local partners will save you time and, in the long run, cash.