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Learning Zone 2020 - Take Your Business Global in 10 Easy Steps

Step 10- Employ External Partners, Consultants and Support

We’ve arrived at the final phase of our 10-part series Take Your Business Global in 10 Easy Steps. Over the past nine stages, you have learnt how to evaluate the readiness of your existing business for expansion, and develop the planning and processes that will enable you to seek new overseas routes to profit.

Positioning the right partnerships and support around your business is important for success whether at home or abroad. As you begin implementing your expansion plan, you’ll want to know that you have a good external network in place locally that is aligned with your goals and can provide long-term benefits to your business.

The final stage of Take Your Business Global in 10 Easy Steps gives you examples of the types of in-country support you should be seeking out, and the questions to ask to ensure they are right for you. Once you have this phase in place alongside the other steps in the process, you have the tools and strategy secured to move forward with your global vision.

Networking

Local business networking groups can put you in touch with knowledgeable figures and partners in your target location. At networking events or even using social groups, source “insiders” and experts – these individuals are valuable for advice and support to your globalisation strategy as they are specialists in local conditions. Think about how you can harness the information they offer to reinforce your activities in their country.

Industry societies

International governing bodies and societies in HR and global mobility such as SHRM, Worldwide ERC, Expat Academy and so on have a wealth of knowledge and resources you can utilise for a membership fee or free in some cases. Many countries have industry groups who help businesses in a specific industry develop their offering and engage the right local partnerships. In Spain for example, an organisation called Secartys provides not-for-profit guidance and support services to companies in the fields of electronics, energy, smart technologies and ICT.

Local partners

Local partners such as lawyers, accountants and recruiters are a must-have for any company wanting to do business overseas. However, it is important to ensure they are reputable, suit your requirements and will deliver even if you are not physically in-country. Carry out robust research and obtain quotes before securing services. Ask the right questions - are they specialists in the chosen market? Are they trustworthy? Do any of your local contacts have recommendations? What are their credentials and can they provide references or testimonials to support this? Are they happy to work with staff within your business who might not necessarily be on-the-ground? Ensure you have watertight SLAs in place with any partner – set ground rules around fees, scope, points of contact and timescales for responses. Mauve Group’s partners are due-diligence checked for compliance by professional third-party Dun and Bradstreet.

Trade and investment departments

Seek support and advice from the Trade and Investment Bureau in your home country on doing business internationally. Similarly, local government departments for business often provide advice and attractive incentives to entice foreign companies into their country and are therefore a beneficial resource.

Global expansion solution specialists

Another alternative is a dedicated third-party organisation specialising in global expansion and workforce mobility solutions like Mauve Group. An established partner of this sort with an extensive worldwide reach can provide a huge variety of supporting services, including project-managing your global strategy, advice and consultancy and/or providing local support for payroll, immigration, compliance etc. Mauve Group has been providing solutions of this kind since 1996 in more than 150 countries worldwide, and is ready to assist if you feel you need support beyond the ten steps of the planning process.

We hope you’ve enjoyed our educative series Take Your Business Global in 10 Easy Steps and have taken learnings and inspiration that will encourage you to embark on your global expansion journey. We’d love to hear from you with any questions or insights on your organisation’s global progress. To get in touch, email us at [email protected] or visit www.mauvegroup.com .

A big thank you to Pinehub and its founder Bassey Duke for providing us with a platform for this series.

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Learning Zone 2020 - Step 7, Familiarise yourself with local law

Take Your Business Global in 10 Easy Steps

Step 7 – Familiarise Yourself with Local Law 

International expansion projects often operate to rapid deployment timescales, tight budgets and urgent in-country requirements. The pressing nature of getting into a new market can sometimes lead to corners cut and snap decisions made. From this, risky situations can arise. Although operating internationally will undeniably broaden your organisation’s horizons, ignoring potential legal red-flags risks will impact compliance and can lead to headaches, penalties and damage control further down the line.

Your venture will run far more smoothly if you arm yourself with a working knowledge of your target country’s legal landscape. In this week’s Step 7 of Take Your Business Global in 10 Easy Steps, we give some guidance on where to focus your legal research.

Think Beyond Your Product

In our pursuit of profit, we sometimes get clouded by the logistical requirements of our product or service and forget the “hidden” legalities of operating an overseas entity. Consider corporate taxation, permanent establishment, labour and immigration laws as well as the laws associated with your product offering, such as import and export regulations.

Visas and Immigration

Ensure that your plans comply to the letter of the law- don’t assume you can send your regional sales manager out to work long-term in South Africa on a tourist visa when he will need a work permit to do so. This type of assumption can cost you huge amounts of money and put your employees at risk. Check the worker’s nationality, the activities that are permissible on different types of available visa and the visa types your local entity can support. Also consider the amount of time the individual will be in-country along with any entries and exits that will be required for things like home visits and business trips.

Employment Law

Be mindful that employment laws may differ from those of your home country and you may need to take professional advice. In fact, we highly encourage this. Mauve’s employment law experts frequently have to step in to assist businesses who have terminated overseas employees according to the labour laws of their home countries, not realising that they have actually unfairly dismissed the employee. That employee may then return with a lawsuit – the judgement often falls in their favour in this situation as they are actually making a completely legitimate claim.

Financial payouts in such a case can be huge – and can spark other employees to follow suit. Mauve’s experts have seen this happen in Italy, the UAE, Japan- all because companies make the assumption they can do things how they do them in their own country. It is very important to avoid that costly mistake.

SLAs

Carefully research any local legal partners and take recommendations from trusted sources. On the subject of partners and suppliers, ensure you have watertight SLAs in place with any local providers you take on, legal or otherwise. If you are not on-the-ground to monitor their activities, you should make your expectations crystal clear contractually - never rely on trust or verbal arrangements. Although local expertise and connections are valuable, make sure you have the right protections in place to minimise the impact of any breaches.

Compliance is Key

If there is one area where you should not economise, it is compliance - the penalties and legal processes relating to non-compliance can be financially disabling and can result in jail - naivety will not be tolerated as an excuse by most authorities.

Companies expanding internationally can benefit from risk assessment monitoring. These reports assess the individual, current circumstances of the company’s operations in their chosen country, and shed light on operational red flags and recommendations. Focus areas of potential risk include disguised employment, correct entity registration, risk of permanent establishment, contracts and labour issues, and tax and accounting compliance.

No serious entrepreneur venturing overseas wants to risk a run-in with the authorities – by acquainting yourself with the local legal environment during your planning, you can avoid endangering your fledgling foreign enterprise. In the next step of the series, we will explore one of the key factors that makes a successful organisation possible – the people. Join us next week for Step 8 – ‘Managing Your Personnel Effectively.’

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Learning Zone - Take Your Business Global in 10 Easy Steps Step 6, Explore Local Financial and Banking Requirements

During the planning phase of expanding your business into a new market, it is easy to get caught up in the excitement and potential rewards that setting up overseas often brings. However, as we mentioned last week as we guided you through costing your venture, ensuring you have tight financial processes in place is important to ensure your business maximises its profits and makes the best of the investment.

Financial requirements will change from location to location, so you should ensure you properly understand the fiscal environment and have sourced the right support before you take the plunge. Some financial aspects to consider as you plan your international expansion:

1.      Is your current bank operational in other markets? Many banks today pride themselves on being international to facilitate cross-border business transactions. If they themselves do not have overseas branches, banks will often create partnerships with other banks in the same group, and piggyback on their international coverage to meet client needs. Could you open an in-country bank account via your bank’s local branch or network, or will you need to source a new, secure and reputable bank to look after your local funds?

 2.      Consider potential bank and foreign exchange charges for any cross-border financial transactions. Timescales for cross-border payments between banks can be lengthy and funds can go missing. It may be worthwhile to use the services of an FX company specialising in international payments and with access to better deals on foreign currency – partnering with companies like this can minimise banking charges and ensure speedier payments.

 3.      The payroll of any local staff, whether expatriates or nationals, is another important factor to get right. Dealing with the payroll of employees in foreign countries can place strain on your resources, especially if you are not familiar with local practices. Taxation requirements are often different from country-to-country – make sure you are paying them correctly in line with local law. Add to that the importance of ensuring your employees are paid on time to keep their morale up, and the process can become a headache – especially if you are dealing with multiple country locations.

 Utilising the services of a global payroll company can help you guarantee compliant and timely remittance of funds to your workers. These companies work alongside your existing, in-house departments responsible for payments, and if they have an international network covering your locations, they can provide a single point-of-contact to standardise your processes.  

 When looking for a global payroll provider, check whether they cover the following:

 ·        Organisation of local payroll set up;

·        Secure records and timely, detailed reporting;

·        Clear local payroll calculations;

·        Rapid movement of funds for salaries and tax remittances;

·        Continuous monitoring of tax regulation in host countries.

If you are planning expansion into one location only, your local accountant may be able to carry out payroll duties on your behalf. Make sure you have good processes in place to ensure timely remittance of funds to your local partner in time for them to pay any deductions to the authorities and the net funds to the worker. A salary deposit can help with this.

4.      Fiscal compliance is absolutely essential to ensuring the success of your international enterprise. Compliance is a key buzzword as governments crack down on loopholes and shady practices to raise funds through fines. Do extensive research on the country’s individual requirements, and check and account for finance and taxation legalities to avoid unnecessary fines. You and your business can be blacklisted from operating locally if you do not comply. This applies to income taxation and corporate requirements.

 5.      Secure the right partners. SMEs and companies in the process of expansion are often priced out of the services of the big 5 international accountancy firms; however, sourcing local accountants and financial advisors can often provide you with good advice on local circumstances and access to better pricing. Alternatively, global service providers like Mauve Group can offer surprisingly competitive consultancy and services through their international network of companies and experts.

 Framing your planning with these considerations will give you the lay of the land when it comes to operating in the fiscal environment of your new location. Next week, we move on to the local legalities of employing staff and running your overseas venture in Step 7 of the series – ‘Familiarise Yourself with The Law’.

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Learning Zone: Take Your Business Global In 10 Easy Steps – Step 4

Through the course of our educational series Take Your Business Global in 10 Easy Steps, we have begun to build a global expansion plan that will allow organisations of any size to take their business to a new international market.

With the right guidance and support, global expansion needn’t be reserved for huge corporates – it can be the realm of SMEs too, provided the right planning is in place to keep the project manageable.

This week, I talk through building a strategy and timescale plan to help you set a flexible roadmap of measurable actions for your global expansion.

Step Four – Establish Your Actions and Timescales

The tenacious nature of global business means we want to be everywhere, and we want it to happen yesterday. However, a global expansion without a clear action and timing plan is a recipe for escalating costs, unmanageable workloads and general inefficiency.

The timescales for your overseas set-up will vary depending on the location and route you choose to take – as you will be aware, some countries are easier to do business in than others and every eventuality should be factored into your planning. As always, it is essential to bring your thinking back in line with the reason for your expansion. Without this framework constantly in mind, you will find it harder to see the bigger picture and then drill down into the detail.

With more knowledge of your target country gained from Step 3 and using your own understanding of your business and industry, try to plot every action you need to take to get there – however minute the detail might be. You can base this on more in-depth market research, recommendations from expert partners, local contacts and so on. This strategy of actions does not have to be finite; it will almost certainly evolve and shapeshift as you go through the process. As long as you factor time to review, reflect and improve, structuring your forward progress in this way will not hinder you.

With actions in place, you can then make estimations of timings for each of these actions. Estimations are fine as long as they are educated and contingencies are factored for potential timeframe increases. When creating a timing plan for a global expansion project, you need to look back to Steps 1-3 of this series and bear in mind the considerations that have been flagged through your initial research.

Considerations for Your Action and Timing Plan

1.      Factors flagged in your external analysis – look back at the research you did on the country you want to expand into and other external influences on your organisations, and map timeframes with these in mind. Educated research online or using the help of expert partners can help you allow for considerations such as the industry and local market environment, the ease of doing business in that location, and any local socio-political or economic impacts that could slow things down.

 2.      Factors flagged in your internal analysis - your product, your financial resources, your internal resources such as personnel and logistics - who will be stakeholders, who is working on the project and how will they manage these tasks around existing workloads. How you plan to operate in country – e.g. setting up an entity, selling solely online etc. What is the urgency of the requirement for you to enter the country – are you meeting immediate demand from a client?

 3.      Timing impacts and contingencies - when we are excited about a project, we often throw caution to potential risks and consider only the positive outcomes. However, preparing for risks and making contingencies in the event of longer timescales gives a greater chance of success for your international expansion plan. Some of the potential impacts to your timing estimations could be as follows:

 ·        Entity set-up – this can be a time-consuming process as you decide on the right type of entity, get your resources in place and file the necessary paperwork. Over on the Mauve Group blog, you can find a comprehensive guide to setting up a company overseas and the considerations you should make when doing so. Visit this link for more: https://mauvegroup.com/news/setting-up-overseas-for-hr-professionals

·        Immigration – as immigration is reliant on the speed of government departments and other external variables, you should factor in extra time for any such requirements. Business visas, work permits and residency permits might be required to allow expat staff to even visit the country (depending on nationality and location) and can require huge amounts of original supporting documentation.

·        Financial and fiscal considerations – ensuring you have the capabilities to invoice and pay is essential and should be factored in. Sourcing a good local bank and opening bank accounts for your business, making foreign exchange arrangements to minimise cost impacts on your business are key considerations.

·        Office and accommodation search – some entity types and locations require you to have physical premises to be considered a legitimate local business. Besides this, you may require office space in order to ease new and expat workers into their new working environment.

·        Expat employee settling in periods – how long will it take your expats to acclimatise to their new home and work environment? International relocations can be challenging on a personal and professional level, so they may not hit the ground running. You should consider this when assessing how soon you will see a return on your investment.

·        Hiring of new or local staff – from beginning to end, the average hire takes between 4-6 weeks for mid-level staff, and this timeframe could lengthen if you are in an unfamiliar job market.

·        HR and onboarding considerations – this includes consideration for obtaining local employment contract templates containing correct labour law provisions, transference from current contract for any existing employees, negotiation of terms, clarifying any legal issues with employment lawyers, registering staff for local payroll and on to company databases, provision of handbooks

 4.      Quality control/auditing your progress -at each key point in the process, allow time to reflect and evaluate to ensure you are doing things in the right way, and if you are not, ensure that you allow space in your timeframe to learn from any missteps. Setting aims for your global expansion makes your roadmap measurable, so ensure it is working for you in the most efficient way.

 5.      Further planning and strategy – it might seem incongruous to plan for planning, but constant re-strategising and future-thinking should be factored into the long-term projects of any successful organisation.

The success of a project relies on timing and resources – and in business, we cannot ignore the importance of proper costing of a new venture. As such, the next stage in the process of developing your international expansion plan is completing a cost analysis. Next week, we’ll be running through Step 5 of Take Your Business Global in 10 Easy Steps – Carrying Out A Cost Analysis

Thanks again to Bassey Duke and Pinehub for featuring Mauve Group on the Pinehub blog.

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Take Your Business Global In 10 Easy Steps – Step 3

In the previous two instalments of our educational series Take Your Business Global in 10 Easy Steps, I gave you the foundations upon which you can develop your expansion plans.

By ensuring you are fully acquainted with every aspect of your business as it currently stands and establishing aims and future plans, you can now get to know your country of expansion in the right context.

This week, we cover the importance of knowing your target location inside-out, and the questions you should ask yourself as you move into this next phase.

Step Three – Research Your Target Market

Building your business will always involve some level of risk. However, there are some areas of the expansion process where you can reduce risk by doing the right research. Become an expert on your chosen location; it is vital to understand the context of the location in which you plan to operate.

If you can, visit the country. Try to find out how locals do business through networking with associates with experience in that location, or consulting local partners. There may be certain cultural factors you need to be aware of. Some of your research can take place online, or through the use of an international market research partner – ask yourself the following questions:

Is there a customer for me in my chosen location?

Ensure your local market research places focus on the potential customer base – the people who will be buying your product are vital in ensuring your move into a new country is worthwhile and profitable. Who are the consumers? How much do they need your product? Can you compete with local competitors? Is there a true niche for your offered product or are you replicating?

With the support of your marketing team, you may wish to create consumer personas – these are character profiles based on the typical traits of different consumer sectors you are targeting. Personalising customers will bring the customer base alive to you and help to frame your local branding and marketing. Head over to Mauve’s recent post on sourcing new customers overseas  for more advice: https://mauvegroup.com/news/expanding-internationally

What is the local marketplace like?

Market research begins with the business conditions in the specific sector you will be operating within, and maps this against the wider context of the country and consumers, using data ad statistics to properly evaluate local conditions.

A good starting point is to carry out a PESTLE and SWOT analysis of the market using the skills you developed in Step One.  Explore, in local terms, the following:

Current trends

Economic and socio-political conditions

Market sector – generalised information and statistics about your product’s local market sector, including number of sales, number of customers available and so on.

Channel partners – these are organisations providing complementary products or services who could be utilised for their customer base.

Competitors

Who are my competitors?

Look at 3-5 competitors operating locally in the same space as you, in the context of the following headings:

-        Product, including branding;

-        Price;

-        Point of sales (e.g. online, stores, b2b etc);

-        Marketing and messaging;

-        Customers, including demographic information.

A robust of awareness of local competitors will make you aware of gaps in the market currently not being filled where you could grow your own niche.

What will I need to adapt about my business to suit the marketplace?

There may be elements of your business that need to be adapted to suit the marketplace or conditions of the new location you have chosen. Can you make and sell your product in the same way? Some basic considerations could be as follows:

-        Pricing/margins; consider any new overheads

-        Logistical or operational arrangements such as manufacture, transportation and storage of goods; do you need local premises and employees?

-        Location of support team/back office/customer service- do they speak the language?

-        Advertising and marketing strategy- is it culturally relevant to new foreign consumers?

With a full picture of the local marketplace now painted, you will be able to frame the rest of your planning in the right context – and should you require support from a professional company in order to carry out efficient market research, there are many expert partners available to do so.

You are now ready to move forward into the practical and logistical considerations of your global expansion; namely, establishing the timescales for implementation and delivery of your new overseas entity. Join us next time for Step 4 of Take Your Business Global in 10 Easy Steps – Establishing Timescales.

Thanks again to Bassey Duke and Pinehub for featuring Mauve Group on the Pinehub blog.

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Learning Zone - How to Take Your Business Global in 10 Steps (Step Two)

Take Your Business Global In 10 Easy Steps

Two weeks ago, I introduced the first instalment of the Mauve Group guide to expanding your business globally: Take Your Business Global in 10 Easy Steps.

I established a clear starting point for the planning and implementation of your overseas expansion project, and gave you the tools to carry out an audit of your business and its status in its existing marketplace.

With this firmly in place, it is time to move into the second phase of the process where you will look beyond the current situation and develop a vision for your organisation’s growth.

Step Two – Where Do I Want My Business to Be?

Once you have established an understanding of your business in its current state and know that you have room within your means to grow, it is now time to consider the future. Think about where you want to position your organisation in two key ways:

Future plans for growth - what is the five-year or ten-year plan for your organisation; what is your general strategy and vision for your business? If you haven’t already, involve key stakeholders and draw up a roadmap or visualisation of how you want to develop as an organisation. This can involve some blue-sky thinking and ambitious targets, but always keep in mind your existing situation and have some understanding of how you can get from here to there.

Once this is clear, consider how these plans map on to your idea for international expansion. What are the benefits and disconnects? Look at the audit of your current operations carried out in Step 1 and ask yourself what you want this company to look like in the future.

Geographically - which locations do you have in mind? The answer to this question may be “everywhere” long-term, but it is useful to map a strategic route to full global coverage. Think about whether entities set up in certain countries could perform as regional hubs, providing your organisation with access to other countries in that area.

Deciding where you want to grow can be difficult to narrow down but by firstly identifying the goals of your growth, a picture of your country strategy will start to materialise, and you will have the foundations from which to develop.

Deciding Where You Want to Grow

This is a big question - but having a proper plan in place will prevent you leaping into your expansion plans two-footed. Clearly marking the aims of the expansion in your mind will clarify and inform the way you build your strategy.

Are you expanding your organisation’s reach, or are you shutting down at home and moving all existing operations elsewhere? This question is important as it will have a bearing on your decision-making and determine the scale of the project.

Think clearly about what you and the organisation are seeking from this decision to expand. What are your key goals? Some key drivers to consider:

-        Are you following known demand for your product or service? Is there an audience for your product there already from online sales data, or have you identified a niche you could fill? Mauve’s growth strategy was triggered by demand for our employment solutions in the Czech Republic in the mid 1990s, where Nokia was rolling out a large telecommunications project and needed our support. We set up companies locally to facilitate these needs and our network grew from there.

-        Are you looking at strategic hub locations to ease logistics issues or create a logical centre of operations? Is the aim of the expansion to set up a new satellite sales office to ease time zone issues and have a more localised understanding of the market, for example?

-        Are you attracted by the prospect of expanding into areas with lower operational costs, so you can reduce overheads and maximise profit gains?

Knowing the answer to these questions will allow you to develop your plans in a mindful and considered way. There may be a kaleidoscope of reasons compelling your wish to expand; no matter which of these drivers you prioritise, it is important to constantly keep in mind the why when considering the where.

You have acquainted yourself with the current health of your business, and carefully considered your aims and strategy for global expansion; what’s next? The answer is that no company can achieve overseas success without properly getting to know their chosen expansion location. In the third instalment of this series, we take you through Step 3: Researching Your Target Market(s).

Thanks to Bassey Duke and Pine Hub Coworking Space for featuring Mauve Group on the Pine Hub blog.