Despite supply chain challenges and economic concerns, 72% of global businesses are still pushing forward with expansion.
Business growth is a key goal of almost every organization. As your brand expands, there are certain milestones you’ll reach. One of the most significant is international expansion.
You may have started as a small, local company, but if you’ve been doing things right, your business might have national reach. The next step is to expand into other markets, but this is a very big step. It’s not easy, but the advantages that come with going global are well worth it.
In this guide, we’ll cover seven key benefits of global expansion. Keep reading for more.
1. Access to Global Talent
One challenge that many businesses have been facing for a long time is a lack of available talent. A business that has a single brick-and-mortar location only has access to local talent. This isn’t always a problem, but it’s very limiting.
Your people are the most useful assets your business has, so finding the best workers will help you achieve any of your other business goals. Having the right people doing the right jobs is one of the best ways to promote growth and success.
There’s an abundance of talent out there. Cities like London, New York, Hong Kong, and many others have a huge number of skilled individuals looking for work. If you can expand into these markets, you’ll be able to reach these talent pools.
For some businesses, this can be incredibly important. If you need employees with very specialized skills, it can be hard to find people who fit well. The wider your reach, the easier it will be to find suitable candidates.
It’s also worth noting that as you expand into new markets, you might be met with unexpected challenges. In some cases, these will require local knowledge to overcome. Hiring employees within these new markets will make it easier for your business to get past these new barriers as they present themselves.
2. Reduce Costs
One thing that often worries business owners about international expansion is the costs that can come with it. While this may seem logical, global expansion is actually often more cost-effective than local expansion.
Depending on what markets you’re expanding into, labor costs can often be cheaper – sometimes by a sizable amount. Material costs may also be lower in some locations.
For some businesses, it can prove beneficial to move entire core operational functions to new areas. Consider your various departments such as customer service, R&D (research and development) manufacturing, and more. Moving these into a new market could be very advantageous.
3. Become More Resilient
Another key benefit of going global is that it can help reduce risk. If a business operates entirely in one country, it could suffer if there’s an event within that country that impacts the business.
Political and economic events can be very problematic. By operating in multiple countries, your business will be less likely to struggle in such situations.
4. Find New Growth Opportunities
Even if your company is having a lot of success where it’s currently based, that doesn’t mean there aren’t more possibilities. You might find that there are unique opportunities in various other countries. This can include things like:
- You have fewer competitors in a certain country
- The target market shows particular interest in what your company offers
- You provide a product or service currently unavailable in certain countries
Market research can reveal these opportunities. You can then base your business expansion plans on these to make your expansion as effective as possible.
5. Tax and Compliance Benefits
Tax and compliance rules vary from country to country. This could work to your advantage when expanding.
For example, some countries may have lower corporate tax rates, different rules on deductions, and different regulations regarding permanent establishment. Changes like these may be better for your business, enabling you to grow quicker and generate higher profits in these new markets.
It’s important to note, however, that international tax arrangements are often very complicated. You need to make sure you’re following the rules of any country you’re expanding into. Working with local tax professionals can be the best way to ensure you don’t make any mistakes.
Global expansion can also affect your business in the US. For example, US tax authorities may tax you based on overseas profits. As such, you should always make sure you get professional advice.
6. Improve Your Company’s Reputation
Almost all companies would love to call themselves “global companies”, but most never reach that point. If yours does, it creates a lot of credibility. Global expansion isn’t easy, so any potential business partners will certainly favor the achievement.
7. Stay Ahead of Your Competitors
One of the many challenges you’ll face when trying to grow your business is competing with others. If there are several other businesses that you’re up against, being able to expand internationally will give you a major edge.
You’ll be able to benefit from everything mentioned above, allowing you to grow and succeed at a faster rate. This will help establish your brand as a leader in your industry helping you to stand out.
Making Use of the Benefits of Global Expansion
It can seem very daunting at first, but the benefits of global expansion make it one of the best moves your business can make. With that in mind, you need to ensure you’re prepared and have a solid plan in place.
Bradford Jacobs has plenty of experience in helping companies expand into new markets. Take a look at our Global Expansion page to see how our experts can help you achieve your business goals.