9 Reasons You Should Take Your Company Abroad
Looking to expand your business to other countries? There are many benefits of taking your business to the international level, specifically in countries like China, Brazil, and Mexico. From tax breaks to new customers, let’s explore some of these advantages so you can start planning your expansion and seeing the growth you’ve been working towards.
1. Discover Brand New Business Opportunities
Moving your business to another country allows you access to markets previously untapped outside the United States. Expanding into a new niche that your competitors haven’t discovered yet can give you a jump on opportunities that can translate to big bucks. Now you can get in on the ground floor, becoming a brand that the country trusts.
By the time your competitors figure out what you’re doing, you’re already in a strong position for growth. Get that edge you deserve by catching them off-guard. Undertake market research to find out which countries are best for you to accomplish this. You’ll have to take a look at the current climate and need for your products or services.
In China, the most popular markets are jewelry, fashion, beauty accessories and vitamins. That may not be so in other countries. Do your research!
2. More Lenient Tax Policies
You can realize big corporate tax savings when you funnel profits through overseas countries who may boast more lenient tax policies for businesses than the United States. Corporate taxes in Bermuda, for example, are at zero percent, which can be a very attractive option when faced with paying higher rates here. It just makes good business sense to move to another country with a much lower tax rate. The United States, in comparison, now has a 21 percent corporate tax rate, down from 35 percent previously.
3. More Flexibility to Take Risks
When you move your business to a country with more relaxed regulations, you are in a better position to be innovative, grow and take risks – more so than you might feel comfortable at home. Economies that allow companies to operate with minimal interference are attractive to all kinds of businesses. As such, you may be able to avoid things like price-fixing rules or anti-competition and labor laws.
4. Become a Trusted Brand
Moving internationally puts you in a position of increasing your prestige as a trusted brand globally. You can’t always do that by simply staying comfortable on home soil. Going the extra mile to increase your reach and showing your customers that care about their needs, cultures, etc. shows them that you are an international brand to be trusted. Think about globally popular brands now and how much more exposure they get. Because they are so big, they are seen as trustworthy entities. While this will often times open up new challenges, these challenges will help you and your team grow and learn on ways you simply wouldn’t by sticking with business as usual.
5. Economy of Scale
By expanding, you will be better able to produce more units. Generally, the more units you put out, the lower your cost per-unit. While this allows you to boost your profit margins, you’ll have to sell to more customers in order to achieve any significant difference. Expansion into other countries provides a vastly greater opportunity from a standpoint of volume and allows you to get in front of a much larger audience. In effect, you’re opening up your growth potential when you market to other countries. In addition to gaining a better understanding of local cultures and habits, living there boosts your exposure and trust factor, leading to more sales and a healthier bottom line.
6. Long-Term Profit Potential
Over the long term, you can save money thanks to reduced labor costs that can really boost your profit margin. Yes, it may take you longer to establish your new business overseas, but it’s often worth it when you can see a better bottom line in your future. You can also reduce the costs of production and staff salaries when you outsource or expand abroad, giving you additional revenue to break into even more markets and produce even more products.
7. Homogenizing Cultures
Cultures are becoming more similar as Western influences continue to permeate. The Internet is largely to thank for all this, as knowledge and understanding of other cultures has softened many countries’ attitude towards acceptance and appeal. In a country where only a few decades ago you couldn’t even consider being accepted as a business (think Russia), today you can appeal to your target audience there through repeated exposure to Western culture. Being able to quickly and easily watch and experience other cultures has opened a broad new horizon and is allowing for many cultures to draw wisdom and ideas from across the world.
8. More Contacts
Taking your company abroad obviously means you must know the local language. The better you can communicate, the better chance of being successful. You’ll be making more contacts that you can depend on in the future when you need them. Knowledge of the local language and customs certainly helps in business applications but also in personal ones as well. Having a broader net offers both additional diversity and also greater understanding of the ways that others interact, live and do business.
9. Second Chances
If you’re finding yourself starting to sink in the U.S. and the business isn’t growing, expanding overseas could give you a new lease on life. If you find yourself struggling in your home market, facing closure even, look abroad for rejuvenation in your product line and customer base. This could open up a whole new world. Just the tax incentives and revenue potential alone could give you another leg to stand on, saving you from stagnation. Plus, you may even develop a newfound passion for your business, inspiring you to take it in new directions.
You never know until you try! But you do need a good foundation of the language to have a chance. Find a reputable language learning program and familiarize yourself with the language of your destination country so you can be as successful in your new business venture as possible.