There are many benefits to global expansion, though some are more obvious than others.
Of course, expanding your business across borders gives you access to new markets and will (hopefully!) increase sales, thereby increasing profits. But there are other ways your business will be enhanced by becoming multinational.
In this article, Claudia Nunes, Director International Corporations, takes a look at the benefits you may not have considered in the hope of encouraging firms to help make our world accessible, more inclusive, and more socially responsible.
Things to consider before global expansion
Deciding on international expansion involves many considerations and you should do your research. Not just on your shortlisted countries (if more than one) product or service attractivity, but also their cultures (especially, but not only, business culture), their markets and regulatory environments.
You should also look at the specifics, comparing between target countries. These specifics include: legislation, entity structures, costs, available incentives (grants or tax breaks available to new businesses or specific sectors), employment regulations, salary rates, normal lease structures and clauses, transfer pricing legislation… The list goes on and on. And, more often than not, careful planning leads to success.
We cover a lot of these points in our Guide to Global Expansion: Growing Global – available to read online or download if you want to delve deeper into internationalising your business.
Hidden benefits of global expansion
When looking at the benefits of global expansion, of course, your revenue potential and risk diversification will grow exponentially. Access to new markets always brings new opportunities, and businesses are always looking for new opportunities.
Here are our top five benefits of international expansion that you might not have considered.
Greater access to talent
Firstly, international expansion gives you access to more (and often, better) talent.
In our post-COVID business landscape, more employees than ever are working remotely, but there are still sectors, industries and trades that must be onsite.
And it’s entirely true that different countries are renowned for different specialist industries. Take Germany’s reputation for excellent engineering, Brazil’s expert software programmers, or Spain’s musical heritage. Why wouldn’t you want the best, whatever their location?
More often than not your new hires will be multilingual, and their local knowledge is one of the best ways to learn the characteristics of the local market, giving you another edge.
Access to new cultures brings new perspectives to your firm, along with new ideas and (possibly even) new solutions.
Every culture has a slightly different perspective; every nation looks at things a different way. Taking the time to understand new cultures – not just the way things are done, but why they’re done like that – can often highlight things that could be improved in your company.
New cultures bring new ideas, which can reinvigorate your company.
Foreign investment opportunities
Learning a new culture, a new location, means being on the ground and investigating. And usually, in the course of those investigations, you’ll come across at least one outstanding business with potential.
Investing in your own business is expected – what about investing in a complementary local business? This not only instantly improves your brand reputation, within and without your new locale, but also builds relationships and encourages your new community.
Investing in other local businesses give you additional income streams, and it lets the locals know you support them, you support the region, and you’re here for the long haul.
Diversifying markets and ensuring business continuity
Your new local provides its own revenue stream – essential when you consider the rising occurrence and intensity of natural disasters in recent years.
Should an unforeseen circumstance arise you can be assured that your other international locations will be able to continue operations and ensure company longevity.
Improve company reputation
Last, though by no means least, global expansion can greatly improve a company’s reputation and boosts brand image.
International expansion gives you the chance to increase your ESG (environmental social governance) standing by getting involved in your new community. Sponsor events or provide funds to a local school, volunteering in the community and supporting local charities – encourage interactions at every opportunity.
Not only will you learn so much about your new location that can be used to market your company, but you’ll also be helping, making your firm known, and improving the goodwill for your brand. Something your clients and suppliers will notice positively and will also help attract and retain the best talent – knowing the company has a good and solid reputation in the markets they operate.
And you’ll find this goodwill goes a long way when you’re looking to expand further…
These are just some benefits of global expansion you may not have considered.
How Auxadi can help you achieve growth and success for your global business
While international expansion can be challenging – having the right, experienced and trusted partners in place can help make the process as easy as possible.
Auxadi have over 40 years’ experience supporting multinational corporations with their internationalisation. We offer services in over 50 jurisdictions across Europe, Latin America, the U.S., and are exceptionally well placed to ensure you’re adhering to local and global standards.
And, using our purpose built and industry-leading MySPV technology platform, you can monitor and manage all your international entities through a single online platform and have a global and harmonised view of all your data.
We have a proven track record and are trusted by some of the world’s biggest companies, and we have the local knowledge and global mindset you need to help with your global expansion.
To help plan your international expansion, download our free Guide to International Expansion: Growing Global, and get in touch with our experts for more information.
All information contained in this publication is up to date on 2022. This content has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this chart without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this content, and, to the extent permitted by law, AUXADI does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this chart or for any decision based on it.