Sunday 26 May 2024

Growing Pains: How To Handle 4 Difficulties With Becoming A Global Business

Growing Pains: How To Handle 4 Difficulties With Becoming A Global Business

Running a business can be extremely complex and challenging. You have to please customers, manage workers, control costs, market your product, maintain your facilities, and conform to a complex legal code at both the federal and local level. However, if you thought this was complicated, it’s nothing compared to running a global business with operations in multiple countries.

All of the most profitable companies in the world have global reach. If you want to reach your full potential as a company, a global expansion is a must. However, the challenges presented by such an expansion can be overwhelming. With that in mind, below is how you can handle four difficulties with becoming a global business.

Barriers to Entry

There are good reasons why some companies choose to focus squarely on doing business in the United States. There can be significant barriers to entry in many different countries that are not the same for a company’s home country. For one, there can be a mountain of red tape to deal with thanks to the bureaucratic structures that control businesses in foreign countries. This is especially the case for countries that are not based on capitalist systems like China.

In China, simple tasks that can take very little time in the US such as opening a bank account and registering your business with the government can drag on for months on end. One strategy for dealing with this process is to have patience and allot extra time to the early stages of your expansion. Having seasoned local legal representation can also help the process move much more smoothly. Overall, expect to invest a good amount into the administration aspect of your foreign branch to deal with all the paperwork and regulations.

Dealing with the Law in Multiple Countries

One of the most difficult aspects of having business operations in multiple countries is having to conform to the law in each different jurisdiction. The rules for what is allowed and what is expected of a company can vary widely depending on the country. How contracts are negotiated and adhered to can be vastly different. The tax burden and tax code can be very different. Labor laws and product requirements can also have stark differences.

As a business owner, it may be a very heavy lift, if not impossible, to learn all the differences on your own. You need attorneys and administrators with strong knowledge of the laws and regulations of other countries you expand into to help ensure everything goes smoothly and you never run afoul of the law.

Cultural Differences

Even if you manage to overcome the barriers to entry and completely conform to the law in a foreign country, your business could still fail significantly. One reason why is that you may not be aware of significant cultural norms that are being broken by your products, services, and marketing.

An advertisement, for example, that is appropriate for the west may be completely inappropriate for a Middle Eastern country. Try to perform extensive research and implement tools like focus groups to help you avoid most of these cultural issues.

Communication Problems

Lastly, communication within a company with multiple foreign branches can be quite difficult. Each country could conceivably speak a different language. With this in mind, it’s important to seek out bilingual leaders and employees early to help ensure that communication between staff at the parent branch and foreign subsidiaries in unimpeded.

Overall, expanding globally can be quite difficult for a company. There are plenty of obstacles to overcome. Still, the upside to doing so can be increasing your revenues and profits to levels you only imagined being possible. Take the time to learn from companies like NuSkin and similar businesses who have successfully transitioned into the global market. While such an expansion requires plenty of planning and hard work, it can be well worth the effort.