Many entrepreneurs in the United States dream of growing an international business. Taking your talents overseas lets you tap into new markets, increase revenue, and build a strong reputation.
But expanding a business outside the U.S. is no easy feat. Making just one mistake can ruin your growth plans. Worse, a misstep could end your domestic business activities altogether. See if you’re ready by reviewing these questions to ask before expanding your business internationally. It may be time to take the next step if you can answer each of them in detail. Reach out to us to speak with a Florida business lawyer.
Six Questions to Ask Before Expanding a Domestic Business Internationally
Is My Domestic Business Stable Enough to Run Without Me?
According to Robert Eberhardt, assistant professor of management at Santa Clara University’s Leavey School of Business, “You’re better going into foreign markets as a strong company domestically because then you have the resources to do it.”
Your international expansion will consume much of your time, even if you have a team helping you. It will also be a significant investment. You must be certain that your business will run well while you’re away so you can use its profits to fund your international plans.
You can begin this process by training someone to replace you or hiring a new manager to fill your spot. Work on transitioning them into your role by slowly increasing their responsibilities. Then, create a monitoring plan so you can stay up to date on the status of your domestic business.
Is There Demand for My Product or Service?
If you have been selling in the U.S. for some time, you are well aware that consumer interest can vary from city to city. Now consider how income, environment, and culture can affect consumer demand from country to country. Just because your business is promising in the U.S. does not mean that your foreign market will like it.
Even major international brands learn this lesson from time to time. For example, Starbucks’s expansion to Israel failed. There was no demand for what Israelis saw as overpriced, unappealing coffee. Fortunately, the International Trade Administration offers market research tools that may help you gauge foreign interest in your business. Dedicating the time now to understand your new market can save you from experiencing the same fate as Starbucks.
What Foreign Laws Apply to My Business?
Understanding and complying with foreign laws is of the utmost importance. Operating in a new country involves a host of legal considerations that may not apply to your domestic operations. Foreign laws address areas such as real estate, contracts, taxes, and regulatory compliance. You must pay close attention to these issues to avoid legal problems and protect your business interests.
It’s not advisable to handle the legal affairs on your own. The risk of misinterpreting a legal obligation is too great. Contact our knowledgeable business attorneys who can guide and support you in understanding foreign laws. With their help, you can maintain focus on reaching new customers and expanding your footprint.
How Will I Hire Employees?
You will likely need employees to run your new overseas business, especially if you are a consumer-facing enterprise. Yet finding the right talent can be difficult if you need employees with advanced degrees or specialized skills. Add on the process of interviewing and assessing these candidates, and you can see the challenge this creates.
Hiring a local recruiting company is often a worthwhile way to find the right candidates. Recruiters understand the local market, can negotiate for you, and may even be able to hire employees from future competitors.
If the talent pool is small or lacks the required skills, you may need to consider hiring U.S. employees until you establish a foothold in the new market. While you may have to pay these employees substantially more to move abroad, this may be the only way to ensure your business succeeds.
What Cultural Differences Might Affect My Business?
According to the Harvard Business School Online, “It’s important and enriching to learn about the cultures of countries where you’ll be doing business.”
Each country has distinct workplace cultures and practices. Recognizing and respecting these norms is essential for a successful expansion. Be aware of how different cultural, ethnic, and racial groups interact with each other. Engage with local leaders to understand their processes and perspectives. This can help build trust and create a positive client relationship across diverse cultures.
Moreover, cultural norms affect business culture and etiquette. You need to create an environment that embraces these norms. For example, research by the Harvard Business Review found that employees in Western Europe had a high level of independence, while those in Australia value working together. Creating a work environment that embraces these norms will help you succeed.
How Will I Resolve International Business Disputes?
Any business that expands overseas will likely enter into international agreements. Cross-border contracts are often complex, especially when it comes to breaches of contract and intellectual property rights. Agreeing to terms you don’t understand could expose you to liability and limit your legal rights. You might find yourself appearing in a foreign court if you don’t choose the proper forum to resolve disputes. For these reasons and more, it’s essential that you work with a business attorney before expanding outside the U.S. Get in touch with us today!
Work with Our Florida Business Attorneys
Once you have answered these questions to ask before expanding your business internationally, consider speaking with a business lawyer about your plans. The attorneys at BrewerLong have the legal and business knowledge to advise you on the best ways to protect your interests and stay competitive. We can negotiate and draft contracts that avoid uncertainty, comply with applicable foreign laws, and include clear dispute-resolution provisions. And if you need to go to court, our attorneys will stand by your side to provide representation.
BrewerLong has over 75 years of combined experience in business law. You can trust our attorneys to advise you on what to consider before starting an international business. Call us today to schedule a consultation.
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