With summer in full swing and holidays at the forefront of many people’s minds, we assess the parallels between planning a trip and expanding a business overseas.
So forget about your vacation checklist and take a look at the things your business needs to consider before it goes international…
1. Research your destination
You would not jet off on holiday without some prior research into where you wanted to go. For example, geographical distance, local currency, language barriers, climate and accessibility all have the ability to affect your international endeavours.
Preparing to trade abroad is no different. Take the time to assess whether the country you are hoping to expand into suits the goals of your business and if the organisation will be able to operate effectively under these foreign conditions.
2. Evaluate your finances
Knowing what is possible within your budget is important and your bank account balance will likely decide whether you experience a luxury getaway or a shoestring escape.
Similar to a trip away, when looking to expand internationally you will need to think smartly about your finances to find the extra headroom above your normal operating budget.
Unlocking cash tied up in your balance sheet or advancing your invoices could give you the additional capital needed to hit the ground running, so thinking about your funding options ahead of time will give you an advantage.
3. Consider the risks
Evaluate what extras you might need to prepare for unexpected challenges. Sorting out insurance, visas and vaccinations, as well as setting aside some additional cash is the sensible way to prepare.
Setting up a foreign entity will require similar contingency planning, enabling you to respond quickly to the local and macro-environment.
Think short, medium and long term about your goals, but ensure you stay agile so you can adapt to the unexpected.
4. Pack accordingly
High up the packing priority list includes the right documentation and how you will best access your money while away. Your company’s “packing list” will need the same careful consideration.
Deciding whether you need team members to relocate to bolster your overseas operations, how you will manage cross-cultural communications and which financial processes will help fulfil your international mission are all aspects that need to be thought about.
5. Partner with an expert
Working alongside an expert can be a guaranteed way of ensuring your holiday is smooth-sailing and seeking external support when it comes to financing an international business expansion can offer the same peace of mind.
When choosing a lender it is important to consider how it will service your funding needs across multiple jurisdictions and currencies, as well as how quickly you can access cash and the ongoing contractual obligations you have to commit to. Setting up overseas involves risk, so flexibility is key to be able to adapt to challenges as they arise.
International invoice finance can provide a flexible and sometimes cheaper solution to freeing up working capital by optimising your cash flow.
Speak to our expert team for advice on how Growth Lending could support your mission to expand overseas.