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HOW TO NAVIGATE INTERNATIONAL EXPANSION DESPITE HEADWINDS

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Archives, Global Site Selection, Global Trade Daily, Site Selection

HOW TO NAVIGATE INTERNATIONAL EXPANSION DESPITE HEADWINDS

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The global pandemic has reminded us all of how inter-connected the world is. As countries emerge from the global health crisis, and economies show steady signs of recovery, companies with global exposure are increasingly optimistic about opportunities outside their home markets, despite a number of headwinds. 

Expanding a business beyond one’s domestic market requires long-term planning, utilization of complex global supply chains, managing risk exposures and being nimble enough to flexibly respond to changing market conditions.

The results of J.P. Morgan’s 2021 Business Leaders Outlook (BLO) survey highlight how leaders are adjusting to this new environment—and finding opportunities to grow globally despite the current challenges. 

In the survey, most midsize U.S. businesses are optimistic, even as they plan for continued unpredictability. Having learned in 2020 how to manage well remotely and deal with disrupted supply chains, U.S. business leaders are staying the course; global expansion plans remain at the same levels from pre-pandemic years. Most forecasts continued steady sales growth outside their home market. This indicates the confidence they have gained from pivoting throughout the year, including accelerating technology adoption, increased digitization of core processes and managing global ventures with much less in-person travel.

Ultimately, the rollouts of COVID-19 vaccines continue to be a core component impacting the global growth outlook for businesses. In addition, geopolitical events, new trade and investment policies and continuously changing business regulations will continue to challenge business leaders seeking sustained profitable international growth. 

Why Expand Globally in This Climate?

With issues such as labor shortages, severe bottlenecks in global supply chains and evolving customer expectations, it can be discouraging to consider international expansion at this time. However, according to the survey, executives remain optimistic. Those surveyed cited access to new customers/markets (72%), better opportunities to serve domestic customers with global operations (37%) and access to suppliers/materials (34%) as key reasons for expansion.

The pandemic will not deglobalize the business landscape. Business leaders have tried-and-tested remote workforces, seen governments become more flexible with business applications, and they have been leveraging new approaches and technologies to keep their business moving forward. In short, they have experience under their belt, have a long-term vision and see opportunity in international expansion—and are not letting the pandemic stand in the way. After all, adapting is what business is all about—and recognizing that extraordinary environments demand tailored strategies based on an accurate reading of market opportunities.

The World Has Changed: 3 Key Strategies for Navigating International Expansion

Developing Strategic Partnerships & Understanding Trade Policy

Trade barriers and tariffs were cited as the top international business concern for globally-active middle market companies in the 2021 Business Leaders Outlook survey. Complying with local regulations and the intricate differences in policy between nations can be overwhelming and time intensive. Any little error may lead to wasted time or resources, complications and added expenses. Developing strategic partnerships with businesses, banks and vendors—those who already have the local intel—goes a long way in effective global expansion.

The many cultural nuances and varying consumer preferences by country also benefit from local expertise. Furthermore, the insight around local competition and market opportunities is more easily obtained through these kinds of partnerships, especially when acting quickly is critical to success.

Increasing global political changes in recent years that are challenging the status quo require extra diligence in this environment. Additionally, the economic reforms under way in many developing countries are impacting both the volume and direction of foreign investment. We especially see this in China, India, Southeast Asia, Latin America and parts of Europe. For businesses navigating expansion in countries experiencing political and economic reform, it’s important to consider the impact these governments will have on fiscal, monetary, regulatory and foreign policy—and how significantly or quickly this may affect foreign investment opportunities.

As a positive example for businesses in North America, the United States-Mexico-Canada Agreement (USMCA) brought timely improvements to trade relationships in today’s volatile landscape. The USMCA has the potential to offer more certainty and a stronger safety net for trade and investment by promoting fairer trade and robust economic growth.

Investing in Technology & Digitization

Trade finance is the nucleus of the day-to-day global economy. It supports every stage of the global supply chain and ensures that buyers receive their goods and that sellers receive their payments. Yet the world faces a massive and persistent trade finance gap. The World Trade Organization estimated between 80% to 90% of global trade relies on trade finance, yet there was a $1.5 trillion gap between the market demand and supply before the pandemic. That gap has only increased since 2020.

COVID-19 accelerated a transformative period for trade finance, primarily through digitization. The global challenge with trade finance centers around inflexible business models, paper-based and tedious processes, regulatory constraints and outdated legacy systems. 

Technology can help bring down operational costs while also increasing efficiencies, encouraging new revenue opportunities, optimizing resources, enhancing the recruiting process … the list goes on. Businesses are investing heavily in digital transformation, with cloud-enabled technology becoming the new standard of operation. This brings immense advantages, including the immediate ability to access data and machine learning (ML) with virtually unlimited computing power, in a split second. The value of AI and ML can clearly be seen across business functions including trading, risk management, marketing and operations. It enhances outcomes by streamlining processes and increasing overall efficiency. 

Additionally, blockchain—a highly secure, decentralized digital record of transactions—offers a multitude of international trade-related applications, bringing high security, automation and traceability to important finance functions. 

Streamlining Supply Chains 

More than ever, managing global supply chains has become a critical skill for companies expanding internationally. Surging demand with various bottlenecks has disrupted global goods transportation and logistics. Gaining visibility over cross-border supply chains, while meeting profitability goals and evolving needs of customers, is an ongoing obstacle for most business leaders. Streamlining the global supply chain and focusing on visibility can lead to increased efficiencies throughout the entire production/solution life cycle. It entails optimizing processes by improving the accuracy of demand forecasts and schedules, and improving production lines to reduce costs. This can help make businesses more agile and profitable. Secure data integration is also critical, so information can be shared across channels swiftly and seamlessly.

While concerns around tariffs and trade barriers again led the list of business leaders’ global concerns in the 2021 survey, managing global supply chains overtook currency risk for the second spot. Instead of focusing on the next crisis-scenario—whether it be a pandemic, natural disaster or cyberattack—business leaders must continue their focus on making global supply chains more resilient for future disruptions.

The Road Ahead: Global Outlook Optimistic for Well-Prepared Business Leaders 

The overall global business outlook is optimistic, with 66% of leaders in the 2021 survey expecting their international sales to increase in the next five years. U.S. midsized, multinational businesses know that sustained growth requires access to new customers in new markets. That won’t change. However, today’s increasingly complex landscape will require greater investments in digitized products and processes, more customized local solutions in widely different international markets, and leveraging the expertise of reliable partners to understand the nuances of operating in challenging foreign markets. At the top of the list is having effective market entry and supply chain strategies, supported by a strong understanding of trade and investment policy to help shape your global market expansion.

______________________________________________________________________

Morgan McGrath is head of International Banking at J.P. Morgan Commercial Banking, where he is responsible for the global relationship management of clients headquartered in the U.S. and overseas. Throughout his career, Mr. McGrath has worked with a wide range of companies, financial institutions and governments in Europe, the Americas and Asia Pacific.

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Archives, Global Site Selection, Global Trade Daily, Site Selection

5 STRATEGIES TO EXPAND YOUR BUSINESS GLOBALLY, EVEN IN TRYING TIMES

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It has been more than four decades since my first overseas assignments in Southeast Asia and the Middle East. Since then, I have encountered numerous political, economic, and natural crises around the world. None at the level of disruption that the current COVID-19 pandemic has had. Nor did any of these events cause as much global change to consumer trends, political upset, economic turmoil, company changes or supply chain disruption. 

To move forward with the expansion of your business into other countries in 2022, it is essential to consider the collective impact of all this disruption and its resulting changes to how global business can be done successfully. The good news is that consumer demand and spending have never been at a higher level around the world. The challenge is to focus your limited resources on the countries that have the highest potential return on your global business development investment.

What follows is a list of strategies to help with global business expansion, even in the extremely unprecedented times we are currently facing. 

Place immense care on where you plan to take your business. 

It has always been crucial to carefully choose which countries are optimal for new business ventures for your specific company and brand but coming out of the COVID-19 pandemic, it is even more critical to relook at all markets to understand what has changed in consumer trends and evaluate economic, political and regulatory changes for businesses in a specific country. 

Governments have enacted COVID-19 related policies and changed tax and foreign investment regulations. As in your home country, these changes have occurred at the national, regional and local levels and will not necessarily be the same as what has been implemented in the country you currently do business in.

Consumers worldwide have learned to buy online and have their purchases delivered. This impacts the entire sales process including retail brick-and-mortar locations. While online buying was present before the pandemic, it accelerated and became the norm in more countries over the past year and a half. Consumers can compare product prices and attributes online before making a buying decision. Marketing and product differentiation are much more critical to a business’ success today.

Cultivate your local partners, distributors and licensees wisely. 

It is important to increase the amount of due diligence when selecting partners because COVID has changed the structure, viability and financial status of most companies. It is essential to find out if who you will be doing business with has the infrastructure and financial resources you require to succeed in a country. 

Do not depend on just what you are provided by the company that wants to do business with you; seek third-party confirmation. This has always been important but given the mass shutdowns of businesses across the globe during the pandemic, it is even more important in today’s international business climate. Spend the money to be sure about who you do business with.

Be prepared to adapt to local culture and changing environments. 

More than ever, clear differentiation by country is essential for your business and brand to succeed. Sensitivity to local business and consumer culture is also a key component. 

Invest up front to learn whether the products and services your business offers fit the current market and project what will be needed to fit in and make money going forward. Expect menu changes, pricing variations, labeling and packaging adjustments, alternate marketing approaches and different costs to do business than here at home.

Given the supply chain disruptions that we continue to see across the globe, it is absolutely critical to work with your logistics specialist to understand the cost to ship products and the timeline for the shipment to arrive in the target country. 

Have strong senior management commitment and a proactive business plan for entering other countries. 

Taking a business into new countries is not typically an instant topline revenue venture, and there are numerous associated costs such as legal, supply chain, training, support and marketing investments to consider. Going global is a company-changing strategy that takes time and strategic planning. 

Devote ample time for developing a plan that projects expected revenue and expenses over time in each country you plan to enter. Note that the cost of doing business varies widely across the world. Labor, cost of goods sold, rent and utilities will be different from country to country. 

Embrace, invest in and implement technology to manage your global activity. The use of technology allows companies to communicate, monitor and manage operations across many time zones in real time and keep in-country training and support costs down. 

Finally, monitor respected international information sources daily to know what is happening in your target country. 

The one thing you can depend on is change coming out of the pandemic. Today, we have to monitor the flow of goods, trade agreements, local regulatory decisions and cross-border trade diplomacy constantly to be able to predict what to do and where to go to make money when doing business on an international scale. As the authority for U.S. companies doing business globally, the daily update at Global Trade Magazine is an excellent source of what is happening around the world.

Bottom Line: I see more global business opportunity than ever before in my career of covering projects across 50 countries. Ninety-five percent of today’s consumers are outside the United States. Two thirds of the new middle-class consumers will be in Asia. Products and services from western countries are highly regarded in emerging markets. With the proper preparation and constant monitoring, businesses with high-quality products and services can successfully penetrate other countries, even in times like these. While it is not an easy process, it can be done with the right strategy and hard work.

______________________________________________________________________

William (Bill) Edwards, CFE is CEO and global advisor at Irvine, California-based Edwards Global Services (EGS). He brings more than four decades of international operations, development, executive and entrepreneurial experience and has lived in seven countries. With experience in the franchise, oil and gas, information technology and management consulting sectors, he has directed projects on-site in Alaska, Asia, Europe and the Middle and Near East. Edwards advises a wide range of companies on early to long term global development of their brands. He can be contacted at +1 949 224 3896 or at bedwards@edwardsglobal.com.

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Archives, Global Site Selection, Global Trade Daily, Site Selection

COVID-19 Introduced a Backdrop of Uncertainty, But Also Opportunity: How Businesses Can Navigate International Expansion

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The global pandemic has reminded us all of how inter-connected the world is. As countries emerge from the global health crisis, and economies show steady signs of recovery, companies with global exposure are increasingly optimistic about opportunities outside their home markets, despite a number of headwinds. Expanding a business beyond one’s domestic market requires long-term planning, utilization of complex global supply chains, managing risk exposures and being nimble enough to flexibly respond to changing market conditions.

The results of J.P. Morgan’s 2021 Business Leaders Outlook (BLO) survey highlight how leaders are adjusting to this new environment—and finding opportunities to grow globally despite the current challenges.

In the survey, most midsize U.S. businesses are optimistic, even as they plan for continued unpredictability. Having learned in 2020 how to manage well remotely and deal with disrupted supply chains, U.S. business leaders are staying the course; global expansion plans remain at the same levels from pre-pandemic years. Most project continued steady sales growth outside their home market. This indicates the confidence they have gained from pivoting throughout the year, including accelerating technology adoption, increased digitization of core processes and managing global ventures with much less in-person travel.

Ultimately, the rollouts of COVID-19 vaccines continue to be a core component impacting the global growth outlook for businesses. In addition, geopolitical events, new trade and investment policies and continuously changing business regulations will continue to challenge business leaders seeking sustained profitable international growth.

Why Expand Globally in This Climate?

With issues such as labor shortages, severe bottlenecks in global supply chains and evolving customer expectations, it can be discouraging to consider international expansion at this time. However, according to the survey, executives remain optimistic. Those surveyed cited access to new customers/markets (72%), better opportunities to serve domestic customers with global operations (37%) and access to suppliers/materials (34%) as key reasons for expansion.

The pandemic will not deglobalize the business landscape. Business leaders have tried-and-tested remote workforces, seen governments become more flexible with business applications, and they have been leveraging new approaches and technologies to keep their business moving forward. In short, they have experience under their belt, have a long-term vision and see opportunity in international expansion—and are not letting the pandemic stand in the way. After all, adapting is what business is all about – and recognizing that extraordinary environments demand tailored strategies based on an accurate reading of market opportunities.

The World Has Changed: Three Key Strategies For Navigating International Expansion

1. Developing Strategic Partnerships & Understanding Trade Policy

Trade barriers and tariffs were cited as the top international business concern for globally-active middle-market companies in the 2021 Business Leaders Outlook survey. Complying with local regulations and the intricate differences in policy between nations can be overwhelming and time-intensive. Any little error may lead to wasted time or resources, complications, and added expenses. Developing strategic partnerships with businesses, banks, and vendors—those who already have the local intel—goes a long way in effective global expansion.

The many cultural nuances and varying consumer preferences by country also benefit from local expertise. Furthermore, the insight around local competition and market opportunities is more easily obtained through these kinds of partnerships, especially when acting quickly is critical to success.

Increasing global political changes in recent years that are challenging the status quo require extra diligence in this environment.  Additionally, the economic reforms underway in many developing countries are impacting both the volume and direction of foreign investment. We especially see this in China, India, Southeast Asia, Latin America and parts of Europe. For businesses navigating expansion in countries experiencing political and economic reform, it’s important to consider the impact these governments will have on fiscal, monetary, regulatory and foreign policy—and how significantly or quickly this may affect foreign investment opportunities.

As a positive example for businesses in North America, the United States-Mexico-Canada Agreement (USMCA) brought timely improvements to trade relationships in today’s volatile landscape. The USMCA has the potential to offer more certainty and a stronger safety net for trade and investment by promoting fairer trade and robust economic growth.

2. Investing in Technology & Digitization

Trade finance is the nucleus of the day-to-day global economy. It supports every stage of the global supply chain and ensures that buyers receive their goods and that sellers receive their payments. Yet the world faces a massive and persistent trade finance gap. The World Trade Organization estimated between 80% to 90% of global trade relies on trade finance, yet there was a $1.5 trillion gap between the market demand and supply before the pandemic.  That gap has only increased since 2020.

COVID-19 accelerated a transformative period for trade finance, primarily through digitization. The global challenge with trade finance centers around inflexible business models, paper-based and tedious processes, regulatory constraints, and outdated legacy systems.

Technology can help bring down operational costs while also increasing efficiencies, encouraging new revenue opportunities, optimizing resources, enhancing the recruiting process…the list goes on. Businesses are investing heavily in digital transformation, with cloud-enabled technology becoming the new standard of operation. This brings immense advantages, including the immediate ability to access data and machine learning (ML) with virtually unlimited computing power, in a split second. The value of AI and ML can clearly be seen across business functions including trading, risk management, marketing and operations. It enhances outcomes by streamlining processes and increasing overall efficiency.

Additionally, blockchain—a highly secure, decentralized digital record of transactions—offers a multitude of international trade-related applications, bringing high security, automation and traceability to important finance functions.

3. Streamlining Supply Chains

More than ever, managing global supply chains has become a critical skill for companies expanding internationally. Surging demand with various bottlenecks has disrupted global goods transportation and logistics. Gaining visibility over cross-border supply chains, while meeting profitability goals and evolving needs of customers, is an ongoing obstacle for most business leaders. Streamlining the global supply chain and focusing on visibility can lead to increased efficiencies throughout the entire production/solution life cycle. It entails optimizing processes by improving the accuracy of demand forecasts and schedules and improving production lines to reduce costs. This can help make businesses more agile and profitable. Secure data integration is also critical, so information can be shared across channels swiftly and seamlessly.

While concerns around tariffs and trade barriers again led the list of business leaders’ global concerns in the 2021 survey, managing global supply chains overtook currency risk for the second spot. Instead of focusing on the next crisis scenario—whether it be a pandemic, natural disaster, or cyber attack—business leaders must continue their focus on making global supply chains more resilient for future disruptions.

The Road Ahead: Global Outlook Optimistic for Well-Prepared Business Leaders

The overall global business outlook is optimistic, with 66% of leaders in the 2021 survey expecting their international sales to increase in the next five years. U.S. midsized, multinational businesses know that sustained growth requires access to new customers in new markets. That won’t change. However, today’s increasingly complex landscape will require greater investments in digitized products and processes, more customized local solutions in widely different international markets, and leveraging the expertise of reliable partners to understand the nuances of operating in challenging foreign markets. At the top of the list is having effective market entry and supply chain strategies, supported by a strong understanding of trade and investment policy to help shape your global market expansion.

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Archives, Global Trade Daily, Relocation Guide

Safely Moving Your Business During COVID

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COVID-19 has changed the way we dine, shop, socialize; it’s even changed the way we move. Moving your business is stressful under the best circumstances. Add in a global pandemic, social distancing, and an ever-changing list of public health guidelines, and the situation can quickly start to feel unmanageable.

But organizing a business move during COVID-19 isn’t impossible. Things may take more planning and involve smaller teams, but at the end of the day, you will have executed a safe and efficient business move.

5 Tips for Relocating Your Business During COVID-19

If you’re reading this guide to COVID-19 business moves, chances are you are either in the midst of pandemic relocation planning or you’re about the start. To make things easier and less anxiety-ridden for you, we’ve compiled these tips to make your business move safe, secure, and efficient. Let’s get to it:

1. Limit the Personnel Involved. This one may seem like a no-brainer but moving is usually a team sport and an “all hands on deck” activity. Pre-COVID-19, office moves usually involved as many people as possible to make packing, loading and unloading, and set-up quick and painless. But during a pandemic, the more people involved in one activity, the higher the risk of infection or illness. By selecting a small moving team, you can easily test each member before the move and track everyone’s health and COVID-19 status throughout the process. If one member of the moving team does get sick, contact tracing and quarantine procedures become more manageable, and you can avoid quarantining your entire staff.

2. Make Sure You Partner with a Moving Company With COVID-19-Specific Procedures. While we’re all trying to adjust to this new normal, some moving companies have already implemented policies to help their clients move safely and efficiently within this new public health environment. Look for vendors that have COVID-19 information on their websites. If you have your heart set on a company that doesn’t offer information on their COVID-19 protocols, make sure you ask about what operational changes they have made to comply with social distancing regulations and other health and safety guidelines. While there are things you can do on your own to enhance the safety of your corporate move, it’s always best to have experts with you that know what they are doing and that have experience in coordinating COVID-19-compliant relocations.

3. Use Storage Units to Lighten Your Moving Load: One of the changes that COVID-19 has brought to the workplace is fewer people in the office at a time. That means you need less furniture and supplies. Instead of moving everything from your old space into your new office site, you may want to consider renting a storage unit to house items that you don’t need immediately. By limiting the number of items that need to be unloaded in your new space, you can reduce moving personnel and potentially decrease the risk of COVID-19 spread. Additionally, by storing unused items, you create more open office space, which means greater opportunities for social distancing.

4. Sanitation is Everything. For many of us, hand sanitizer, masks, and other personal protection equipment (PPE) have become daily staples. Your office move is not the time to relax your reliance on Purell and surgical masks. Throughout your move, make sure that all personnel involved in packing, loading and unloading, and new office set-up are using hand sanitizer and other cleaning supplies regularly. Vaccinated or not, everyone should wear a mask; shared surfaces should be cleaned and sanitized regularly. A pro tip is to give everyone in your moving crew a bottle of hand sanitizer with a built-in clip or rope so they can attach it to their pants or jacket and have it on them 24/7. With masks and gloves, it’s always a good idea to have multiple boxes of each on-hand at all times since these items tend to rip and tear easily during moves and periods of heavy exertion.

5. Make Sure Your New Space is COVID-19-Safe. Before you move everything into your new space, complete a walkthrough and identify ways to make your new office space COVID-19-compliant for your employees and guests. When setting up your new space, make sure to:

-Space desks or cubicles as far apart as you can to allow for proper social distancing. In situations where six feet of space between desks is not realistic, try installing partitions or plastic shields to make up for the lack of physical distance.

-Create PPE stations for your employees and guests. By creating easily accessible PPE stations (stocked with masks, gloves, and anti-bacterial gel or lotion), you provide ample opportunities for people to stay safe and protected.

-Ventilate your space as much as possible. Whether you open windows or find ways to optimize artificial airflow, ventilated spaces tend to be safer.

Moving your business during COVID-19 will look and feel different, but different isn’t always a bad thing. While you may not be able to amass a moving team of 50+ employees or crowd everyone onto a loading dock to unload trucks of supplies, with some planning, forethought, and a few modifications, moving your business during COVID-19 can be executed safely and efficiently.

________________________________________________________________

Davida Redmond is the leader of the Marketing team of Mobile Mini; the world’s leading provider of portable storage solutions committed to providing our customers with superior services and access to a high-quality and diverse fleet.

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Archives, Global Site Selection, Global Trade Daily, Site Selection

How to Expand Your Business Internationally

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Running a successful business in a domestic market is easy for experienced business people. Opening a shop abroad is harder, but not very much. What can be extremely tricky is actually attracting foreign potential customers, turning them into paying customers, and surmounting the many challenges that come with international business. These challenges include cultural and language differences, unfamiliar employment and overall business laws, unclear taxation and VAT remittance regulations in different countries, and international marketing challenges. If you wish to expand abroad, you can overcome the said challenges by following these best practices in international expansion:

1. Leverage PEO services

PEO service providers help to expand businesses to hire staff, manage payrolls, and manage employees in foreign territories. Basically, a professional employer organization (PEO) will provide comprehensive human resources support for your business so that your senior executives can focus on actually running the corporate side of the business. They provide your international teams with the professional and personal support they need to be optimally engaged and productive for the benefit of your business. They help you bypass the cultural barriers that overwhelm employers when hiring and managing new talents in unfamiliar cultural settings.

In most cases, PEOs run a co-employment model where they ensure that your business meets all set employment and compliance laws without necessarily having a physical presence in a given country. The advantage of using such a model for your international expansion is that your business can dip toes in multiple foreign markets without committing to building physical offices. It also offers your business a flexible human resource capability; the flexibility and fluidity that businesses need when upscaling/downscaling workforces in new markets. Therefore, if your company operates in India, you can see that partnering with an India PEO would be the proper solution for the rapid growth of your company.

2. Leverage local influencers

The biggest marketplace in the world right now is the digital space, notably social media. That is why you must have a workable digital marketing strategy (and a strong online presence for that matter) whether your business is local, national, or international. A key component of digital marketing is social influencing.

You probably already understand what online influencing is about but in case you don’t, online influencers are celebrities who already command huge followership on social media. People who can influence shopping decisions either by directly campaigning for your products or by sharing their videos or photos while using your products. Studies show that about 66% of all customers across all industries trust the opinions other customers post online, and the surest way of influencing these opinions is through social media influencers.

Now, this is the catch: When expanding internationally, you need to meet your prospective customers during their research phase. You need to capture their attention immediately; they search for products in your niche, convert them to business leads, and close the deal on the spot. It is probably the first time they are interacting with your brand/content, so you have to make the best first impression otherwise they will be lured by the brands they are already familiar with. Subtle product mentions and testimonials from influential people will help you create the best first impression. You, however, have to identify and connect with influencers who appeal to your audience if you are to effectively leverage influencer marketing for international expansion.

3. Find the right expansion partners

It is hard to navigate new markets by yourself. You need the help of local partners who understand the unwritten laws of the land, local supply chains, and distribution channels. But not all local partners are good for your business. You need to find industry leaders who, on top of understanding the nuances of the local market at hand, have substantial experience in international business expansions in other markets. You can always contact their previous collaborators for reviews, something you cannot get from partners who have never been out of their comfort zone/market. It is also wise to choose expansion partners with whom you share a common ground- a company whose business culture doesn’t conflict with your vision and mission.

Now you know the kind of partners to look for, but where exactly do you look? One way to find the partners you need is through your business and professional networks. Your business associates can recommend their international associates to you who’d turn out to be very helpful in your expansion plans. Another source is the government of your current market. If you operate in Europe, for example, you can tap into the database of the Enterprise Europe Network (EEN) for trading advice and collaborations. Foreign embassies, as well as trade commissions back home, also have databases filled with the knowledge that can come in handy during your quest to find international partners. And if you already have a set base in the foreign market, attending local expos and trade shows can give you access to a pool of potential partners.

4. Leverage government resources

Most governments help their ambitious entrepreneurs to go international as a way of encouraging the exportation of locally-produced products and talents. Your government probably holds Trade Events where successful multinational companies’ CEOs and other industry experts train local entrepreneurs on how to go global and actually succeed. You can learn a lot in such events, from exporting fundamentals, understanding international buyers, working with foreign distributors and product representatives, to how you can market your products or services to customers who don’t speak your language. The events also put you in touch with other ambitious business owners from whom you can gain insight and insider perspective about your chances abroad. Other resources that can help your international expansion plans are catalogs that contain special country-specific market reports authored by prolific market experts. In the US, such catalogs are accessible online through the Market Research Library.

Conclusion

International expansion is, to many people, chaotic and stressful. But it doesn’t have to be. You can tap into other entrepreneurs’ experience to formulate a workable expansion plan or, if you have the budget, conduct your independent country-specific market research. Our 4 tips will get you started, but you must consult wider if you are to succeed with your first expansion attempt.

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Archives, Foreign Trade Zones, Global Logistics, Global Site Selection, Global Trade Daily, Site Selection, Trade Credit Insurance

Minimize Foreign Trade Risks with These 10 Tips

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Does your company follow a strategy to go global? International expansion brings endless opportunities. Statistics show that companies that export boost their productivity by 34% on average over the first year. They are also more likely to survive in the long term when compared to companies with a local focus. 

However, we must emphasize the fact that foreign trading comes with risks. Currency, credit, intellectual property, transport, logistics, ethics… you’ll be dealing with a lot throughout this journey. Being aware of these risks and taking steps to minimize them will ensure the success of your brand’s international trade management.

10 Tips on How to Minimize Foreign Trade Risks 

Make Sure Your Products Are Allowed for Distribution

This is the first thing you need to check: are you allowed to trade with your products in the respective country? For example, the EU has strict regulations that prevent many goods from China from being imported. Each country has its rules, which your business must respect. Otherwise, you would waste a lot of time and resources planning an impossible expansion project. 

You can get familiar with the rules by reading relevant laws and regulations or contacting the customs services.  

Focus on the Legal Aspects of Business Expansion

Each country has its own regulations regarding businesses from abroad. Legislators set the legal framework and conditions for FFcustomers, sales, and particularities regarding the industry. It’s important to be aware of all these details ahead of time. When designing your strategy and drafting the initial contracts, you should make sure you stay within the legal framework of the country where you expand the brand. In addition, you should be aware of potential legal disputes and their solutions. 

Most business owners hire lawyers in their respective countries. A lawyer from your own country can also make connections and give you the details you need.   

Get Shipping Insurance

Everything looks well on paper. You consider the costs of production, transport, marketing, sales, and everything else related to selling your goods abroad. But there’s a risk that business owners often forget: damage during shipping. Items may break or get lost during transport. Your shipment may become a subject of theft or even vandalism. Accidents and contamination happen during transport all the time. If you don’t get good insurance for your shipment, you risk losing a lot of money. 

Proper insurance is not cheap. You should talk to several agencies to get the best offer on international shipments. We recommend using the best finance apps to plan all costs, including insurance over a longer period of time. These apps will help you calculate a decent budget and determine a final price that won’t leave much space for losses. 

Consider All Currency-Related Things

When planning foreign trade financing, you’re guided by the official currency in your own country. You focus on evaluating the risks related to credit, but as most business owners, you might forget about one thing: currency conversions may initiate losses, too. 

The COVID-19 crisis hasn’t been kind in this aspect. In March 2020, emerging-market currencies faced losses of up to 30%. That’s something that nobody could have predicted. However, you can analyze the movement of relevant currencies and estimate potential losses. You might need to work with a financial expert to make these evaluations.  

Evaluate the Risk of Protectionism

Trade protectionism is a policy for protecting domestic industries from foreign invasion. If, for example, a particular country stimulates the domestic flour milling industry, it will impose import quotas, tariffs, and other handicaps on foreign traders. Governments do this because they don’t want foreign products to drop the market prices and get the domestic industries in trouble. 

If you plan for global exposure, you have to learn about these policies. You must take the additional expenses into consideration, so you’ll evaluate a realistic final price. Will it be acceptable for the living standard of the respective country?

Register the Corporate Names and Trademarks

When doing business abroad, you risk violating another brand’s intellectual property rights. You can avoid that by registering your brand’s names and trademarks. If that process goes undisturbed, you can feel free to offer the products on the respective market. 

Consider the Risk of a Changing Market Environment

No market situation is stable and rigid for all times. You will develop a general strategy, which will be based on solid international risk management. But no matter how well you predict potential risks and future circumstances, you cannot be 100% sure that you did it properly. 

In Deloitte’s Global Trade Management Survey, none of the Swiss chief financial officers who participated thought that the global trade environment would become less complex. Only 15% of them said they expected the conditions to remain the same. 

Your company must continuously review the strategy and make the needed adjustments as the market circumstances evolve.   

Evaluate Foreign Ethical Standard

When offering your products on a global market, you should think about the differing ethical standards that you’ll face. For example, Israel has a thriving vegan culture. It might not be a good idea to trade fur there before evaluating the risk of getting your brand dragged through discussions as an unethical one. 

Get well informed about the customs and social conditions in the country where you plan to expand. 

Invest Time and Resources on Collaboration

Business owners often neglect the need to get comprehensive advice through collaboration with foreign lawyers and governmental services. They want to save time and money, or they simply forget that getting insider information is crucial before international expansion. 

You need to talk to experts who will explain the laws and regulations. You might need finance experts from abroad as well. In addition, you have to collaborate with industry insiders who know the market and can help you build a solid network of connections.

Get Acquainted with Foreign Business Customs

You may be used to a direct, friendly approach with a bit of humor in the mix. But in a foreign country, such an approach may be considered unserious or even offensive. Intercultural differences are a major factor in foreign trading success. 

You have to get acquainted with business etiquette when entering a new market. You can find this information online, but it’s best to hire a business advisor from the country in question. You’ll get proper guidance from someone who knows the target region and the communication etiquette in the particular industry. 

The country’s culture, politics, and economy are also important. Learn as much as possible, so you can start and maintain a productive conversation with potential partners. 

Foreign Trade Is a Complex Endeavor

Yes, it will be a rewarding experience for you as a business owner. With the right approach, you’ll take your brand towards substantial growth. However, you have to conduct basic research regarding the risks you’ll face during the expansion. This is a process that requires thorough planning, so don’t rush through it.

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James Dorian is a technical copywriter. He is a tech geek who knows a lot about modern apps that will make your work more productive. James reads tons of online blogs on technology, business, and ways to become a real pro in our modern world of innovations.

economy
Archives, Global Logistics, Global Site Selection, Global Trade Daily, International Trade, Stories

Back to Growth: U.S. Business Leaders Have Rosy Outlook for Economy

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The COVID-19 pandemic has affected every aspect of our work and life.

Business executives have had to quickly reconfigure operations, and millions have had to unexpectedly work from home or cease work entirely. Videoconferencing has become the killer app, and Zoombombing became a new privacy concern.

Despite the widespread health and business challenges brought on by the coronavirus, two-thirds of U.S. business leaders are optimistic the domestic economy will recover within a year, according to a survey TMF Group recently released.

It’s an encouraging sign that business executives in the U.S. are expressing this type of optimism, particularly based on the unprecedented challenges experienced throughout the economy over the last few months. This group was obviously very confident before the onset of the pandemic, and they now seem eager to not only restart their businesses but help reignite the economy as well.

We conducted the survey in the middle of April to gain insight into how companies plan to navigate these uncertain times. More than 40 percent of the 300 decision-makers who took part in the poll work in companies with more than 5,000 employees. Most of the respondents (85%) said their companies do business outside the United States.

Nearly a quarter of respondents (23%) expect a V-shaped economic recovery, meaning a dramatic bounce to pre-virus activity by the end of 2020 following the sharp collapse. Only a small minority (12%) anticipate the economic impact of the pandemic to the last two years or more.

Looking beyond the U.S., business executives were a little less optimistic but still positive: 56% of respondents said the global economy would recover within a year.

It may be easy for critics to judge the survey takers as stereotypical American optimists, but I believe their confidence is grounded on some key facts. The economic shock has been largely demand-driven, as travel restrictions and government stay-at-home orders shut down wide swaths of the U.S. and global economies. Many of the world’s governments acted quickly to offset the economic damage. In the U.S., the federal government and central bank organized a massive stimulus package and pumped trillions of dollars into financial markets. More than 60% of respondents said the financial support to workers and businesses in the U.S. has had a very positive or somewhat positive effect on their companies.

Now, as states allow more businesses to reopen, consumers are eagerly venturing out despite the ongoing health risks. As consumer and business demand rebound, companies will begin hiring again.

Indeed, business decision-makers are confident their businesses will rebound quickly. More than half say their companies will return to normal operations within six months.

In times of crisis, there’s a premium on bold leadership and decisive action. Resilient leaders continue to mount appropriate responses to the global pandemic while charting paths to recovery.

The survey underscored that the pandemic has forced business to rapidly evolve. Many are moving ahead to reassess, reimagine or reinvent their businesses. Thirty-six percent say they plan to accelerate plans for international expansion, and 32% plan to seize domestic growth opportunities.

It’s a positive sign that the strategic imperative to go global remains strong because COVID-19 has dealt a serious blow to the international system. The World Trade Organization predicted in April that world merchandise trade would plummet between 13% and 32% this year.

But the factors that have driven globalization for several centuries have not disappeared. People have been driven to seek profit internationally since the earliest days of the Silk Road, and this instinct will continue. Furthermore, the spirit of international cooperation has been strong in the response to the pandemic. Companies, government agencies and nongovernmental organizations are working across borders to solve problems at scale, such as developing a vaccine for the coronavirus.

A big motive for international expansion is the diversification of supply chains, cited by 35% of respondents. The coronavirus has interrupted the flow of goods across borders, from raw materials to finished products. The disruption has vividly illustrated that today’s highly interlinked, international supply chains have more potential points of failure and less margin for error for absorbing delays and disruptions.

Reducing dependence on one country or region is a priority. Diversifying your supplier base may increase costs in the short-term but will make your network more flexible and agile and potentially reduce the economic shock of future disruptions.

The outbreak of COVID-19 forced business to reassess every strategic objective and business plan. The health crisis has exposed vulnerabilities and created unforeseen challenges.

As businesses around the world consider how they can return from the economic crisis unleashed by COVID-19, the survey results provide some food for thought. Expanding internationally or domestically in uncertain times, for instance, may seem counterintuitive but could also fuel faster growth. Severe adversity provides real perspective. It is possible to find strength and confidence in the face of real hardship.

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TMG Group is an international professional services firm that provides administrative support services across multiple jurisdictions.

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Archives, Global Site Selection, Global Trade Daily, Special Reports

7 Tips For Starting A New Business Overseas

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Moving abroad has been the dream of many people. Instead of traveling for a vacation, you can move to another country and establish your life there. Setting up a business is one of the best ways to settle abroad. But what are the odds that your business will succeed? That is the worry for most people who intend to start a business abroad.

This article aims to give you hope and remind you that it is still possible to do business overseas. Once you are set, you can travel to any country that you dream of living in and start your establishment. All you need is a market for your products and comply with the local government regulations. On top of that, be aware that sometimes you may be far from your establishment or home if you do not intend to move permanently.

These seven tips should help you to successfully run any business of your dream in a foreign country.

Pick Your Ideal Destination:

Before you can travel and start your trade overseas, you must be specific about the place you want to settle. Many factors will determine your destination. The climate of the region can so much affect how you cope with the transition. For instance, if you come from the tropical regions, moving to the colder regions might be a harsh encounter, and you will take time to adapt.

You would also want to research the economic and political stability before you move your investment there. You cannot put up your business in a place where you cannot sleep peacefully or are not sure if the product value will fall and lose your investment.

Learn the Local Language and Culture:

When entering into business, you should expect to interact with the local community. People are always skeptical when it comes to new businesses. They want to learn your business model, treat them, and your attitude toward their way of life. As you must be aware, nobody wants to give up on their culture.

Therefore, your business idea should not cross the customs of the people in the country you want to settle. Learning the local language makes it easy to blend with people and understand each other – improving your services to the consumers. However, the language will come in slowly when you finally settle.

Evaluate the Market:

Market research is essential when starting up a business abroad. What do people like? How specific are they when they buy their products? What pulls them to other brands? In your research, you need to understand two things. First, you should know who your ideal customer is and what they want. You also want to learn some things about your competitors.

How has the product you intend to launch been doing in the past – or anything similar? Knowing other traders’ performance in your industry will help you understand the growth potential of any new investment in the region. If your competitors have had some growth, you can invest in the industry and acquire customers.

Legalize Your Operation:

Each country on the planet has its laws regarding business operations. You should, as a fundamental step, register your company abroad when starting. Later on, you will want to register trademarks as well for your convenience. Inquire about business registration and licensing requirements, because in some regions, they are offered separately.

For small businesses and operations like retail and supermarkets, you may only need a local business license to operate. However, if you are into manufacturing, assembly, and supplies, you will need to register a company. You can consult an attorney about the process or visit a registered company formation agent to complete the registration process.

Expand Your Network:

Connections matter a lot in every aspect of our lives. In business, we need to engage with people who know the surroundings and the requirements we need to fulfill to ensure that we run our ventures smoothly. When you plan to move abroad, you should get in touch with businesses and people who can help you start.

Relationships also create lasting trust between you and your network. The network you have can support you in many ways through your business and provide any assistance you may need during challenging moments. It would help if you did not ignore your competitors as they are vital for the growth of your business.

Start with Freelancers:

Managing employees might be another issue people worry about when thinking of setting up a business overseas. How will you compensate your workers? What terms do you need in a foreign land? What about taxes and insurance? All these things might consume your time, money, and brains.

Managing employees has never been easy, and it is not going to be any time soon. As a startup, you should think of ways to run your business without formal workers at your premises. The initial stages of a business setup may not need workforce until you establish a customer base. Therefore, you are better off paying freelancers for the available tasks and pay them hourly or on daily wage agreements.

Set Up a Website:

We are in the 21st century when digital marketing matters in all business sectors. As a startup, you want to reach more prospects both locally and through the states and beyond boundaries. Various marketing channels are essential, but you need to reach more customers online through social media, content marketing, and PPC. It would help if you did not forget about SEO and the long-term customer flow.

However, all forms of digital marketing have something in common. Consumers interested in your ventures need to click on a link or button to read more about your business and products. You must, therefore, have a website for people to learn more and interact with your brand. Ensure that you have your contact information on the site, and make it easy to access mobile devices.

In Summing Up

Moving abroad to start a business is an awesome idea. Therefore, you should make sure that everything you will be doing is compliant with the local authority laws and consumer expectations to sustain growth. Research is essential, and preparation in every aspect is mandatory. Give no room to chances, but exploit every opportunity to grow.

Archives, Global Trade Daily, News

Report: Global Expansion Addressing Talent Recruitment for U.S. Tech Companies

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A report released by Velocity Global revealed an interesting approach U.S. technology companies are planning to tap into a broader talent pool. The State of Global Expansion 2019 report, which surveyed 500 U.S. and 500 UK tech companies, confirmed 85 percent of firms plan to implement global expansion efforts in markets known for having the highest potential for the best global talent, such as Europe (23%) and Asia (23%).

“The survey provides a fascinating snapshot of the way U.S. tech firms are feeling about their global ambitions,” CEO of Velocity Global Ben Wright said. “It reveals an outward-looking sector that has the confidence to pursue growth internationally and recognizes these companies understand the benefits that global expansion can bring to businesses.”

“Crucially, the businesses we polled recognize that when it comes to tech, people are everything,” Wright continued. “Many of them are expanding overseas not just because U.S. tech carries with it a reputation for innovation and excellence, but also because they want to ensure they have a presence in markets with the brightest talent.”

The survey also revealed talent recruitment continues to be a primary challenge above employee immigration management, long-distance client communication, finding expert consultancy, and managing new payroll processes. International expansion is the common solution among U.S. tech companies, as more results from the research confirmed companies seeking to add talent are looking beyond U.S. borders, and into foreign markets. Out of the 54 percent surveyed companies operating strictly in the U.S., the report revealed that this number will drop to only 22 percent by the end of 2019.

“It’s understandable that some businesses continue to have reservations about taking those first steps into unfamiliar overseas markets. Yet more often than not, the myriad opportunities outweigh the risks. And with the right advice and an expert partner on hand to simplify processes, it can be hugely rewarding and the route to future growth.”

To read more about the report’s findings, visit: VelocityGlobal.com