The True Cost of Exporting: Operating Overseas
Expanding your business overseas into new markets is one of the most exciting moments for small businesses and entrepreneurs. However, it is easy to get caught up in the excitement and opportunities and make some novice mistakes that could cost you big dollars and even affect the success of your business abroad.
Research your market
I cannot stress enough how important it is for businesses to do background research into the market they are entering. Every country and every city has their own set of rules and regulations.
Understand the competitive environment of the market within your industry. Think about what cultural and political elements might affect your business success. It sounds logical and common sense, but in my experience of helping Australian businesses expand internationally, this is the most common mistake.
Exporters should take the time to discover the finer details in their chosen market. Tax, labour, and trade regulations can present nasty surprises.
On the other hand, many cities and countries offer worthwhile incentives and tax benefits for businesses. Knowing about the incentives could help you choose the right market and right conditions to give your new business a high chance of success.
For example, many Middle Eastern countries have ‘Free Zones’, which make it easy to set up your business, bypassing the local incorporation and trade licence requirements.
Things that you should think about in the business environment include:
- Business arrangements: what is required to start up, what company structure arrangement choices you have to have.
- Tax system benefits
- Labour laws and regulation
- Local hiring requirements
Government agencies like Austrade, business associations and chambers of commerce all able to provide sound advice for businesses looking to expand. When looking for office facilities, make sure you look at what technology services are available to you. IT support will be a crucial factor in business success abroad.