For business people of all kinds there comes a point when they find they’ve achieved a great deal in one place and they decide they want to expand and test their potential somewhere new. Many decide to look beyond their own boundaries and look across borders to new markets abroad. Taking your business abroad will bring all kinds of new opportunities as well as exciting experiences. But it comes with pitfalls too which you should think about carefully before heading off to somewhere you don’t know all that well. There are indeed different avenues that you may wish to pursue when moving abroad, and each comes with benefits as well as drawbacks.
Acquire or Invest
One method of breaking into fresh markets is to acquire an overseas company that is already well established. This can allow you to move quickly in establishing your presence, but it also comes with risks attached. You gain access to an immediate base of customers and workers as well as established branding and technology. But it also means you take on the problems of the company you’re acquiring, and you may find your firm and the foreign firm have ambitions and ideals that come into conflict, or that bring potential legal problems. A slower approach to entry into overseas markets is greenfield investment, where you start off with nothing and build up the business. While it takes more intensive effort and labour, it means you’ll enjoy far more control over your company.
A less risky way of entering a foreign market than greenfield investment is through licensing the distribution rights to a company’s products or services to a foreign licensee. This does however come with a key drawback in that it takes away your control and may even make the licensee a competitor. There is also the risk that the licensee mismanages the brand and damages its reputation. But on the whole it can be an easier way to enter a foreign market and brings with it great potential for a quick return on investment. The lowest risk and lowest investment can be guaranteed simply by exporting your products directly to foreign firms. But it comes with logistical issues and extra expenses due to import and export tariffs as well as distribution costs. If this is the way you want to do business, then hiring an overseas import agent will help you greatly.
Ultimately however it depends on your business plan and the field in which you’re operating. Always pay close attention to exchange rates through companies like Currencies Direct so you can decide what’s best for your company. If you have a clear vision for your company and its future, you should be able to find the right approach for you.