International business expansion

With time, successful business ventures undertake to push the boundaries of one country to expand internationally. Especially, if you consider the purchasing power and little competition in some areas, the potential sales can surpass the profit at home.
It is not necessary to move abroad to open a branch there. Having relevant knowledge and using the support of experienced immigration advisors it is possible to achieve significant progress without changing your lifestyle. However, before expanding the business, it is essential to go as deep as possible into the topic, to understand the general operating principles and to get the support of reliable consultants.

Fundamental features of overseas market

The success of your plans can be influenced by:

  • Lack of boundaries for expansion. As soon as a company starts international business expansion, intra-country trade borders are erased. Once a branch is opened in one country, it is much easier to open new branches in other countries. As a result, the product can be recognised worldwide, making the business founder famous and wealthy;
  • Reaching more well-to-do consumers. This does not mean the quantity of sold products will grow per capita. This means the higher price will not deter potential buyers, because the average income in economically developed countries often exceeds the salary of the average worker in other countries of the world;
  • The company will have a cash flow of dollars, euros, and pounds. These hard currencies are supported by the stable economies of the respective countries, which are most resistant to world crises;
  • Low competition in the business environment due to progressive strategies used by entrepreneurs striving to enter the global market, while local businessmen are used to decades-old planning and find it difficult to move away from it. Secondly, one country’s products can often be fundamentally new to international consumers.

All these factors make international business expansion extremely attractive. You can either sign supply agreements with overseas companies and only export products or open a brick-and-mortar retail store and accept direct online orders as well. Any form of business will be successful if you have good marketing strategies for this or that particular market.

First steps to entering international market

Entrepreneurs wishing to expand their business should, first of all, decide on the goods or services that they wish to sell. For this purpose, a unique selling proposition is a great tool to consider the main parameters of the product. Such a proposition should meet the following criteria:

  • The product solves certain consumer’s problems, it is convenient and easy to use;
  • Lack of similar products on the market;
  • A pool of potential buyers should be as wide as possible.

Ideally, the product to be sold should meet all of the requirements; then you can safely count on a successful trade and good profits. However, it is not easy to develop a sufficiently suitable offer. We might help you by listing groups of goods that are popular with foreign audiences. This will be a good start.

Ideas for most sought-after products

It is worth entering the international market with appealing and useful goods that will quickly find their buyers. Low-cost manufacture and transportation will also advance the high sales value of the goods. There is a list of goods that at first glance may seem quite suitable. However, local entrepreneurs have already filled such a niche, or they are not popular, or they are subject to border controls with mandatory certification and tax charges. And, as a result, the end consumer will face a significant cost increase.
All this makes the following categories unattractive for business:

  • Electronic appliances made in and exported from China;
  • Clothing and footwear from well-known manufacturers;
  • Alcohol;
  • Medications.

At the same time, demand for other products remains consistently high. Below are some groups of products which are excellent for developing a unique selling proposition:

  • Souvenirs made by artisans and craftsmen. The international market is full of Chinese fakes of various quality. And no matter how hard Chinese factories try, their knock-offs are still far from looking like the original items. Therefore, a consumer will easily distinguish the original item from the fake one. And the more such imitations are sold, the more valuable are the original branded things;
  • Cosmetics made from natural ingredients. The valuable properties of products speak for themselves in the form of ingredients, promising an amazing effect. And it is well known that buyers are usually happy to spend money on their appearance;
  • Local brands of clothing and footwear, not mass market. Clothing with national symbols and emblems is particularly in demand;
  • Carved wooden household items, furniture and houses;
  • Innovative manufacturing, trade and entertainment equipment and machines;
  • Software, development of standard and customisable applications;
  • Handmade goods both for daily use and interior design.

How to define your niche?

It is important to understand that even following the recommendations does not always bring quick success. Promoting your company is not an easy task, especially for those who have not lived abroad and do not have a clear idea of the way of life of potential consumers. To mitigate risks, it is worthwhile to do market research and calculate the profitability of the planned campaign. One should not forget about thorough calculations of future costs for product manufacture, personnel, equipment and premises, and transportation costs. Neither at home nor in a foreign country will the consumer overpay even for a quality product when a similar one can be purchased for less. Besides, over time, suppliers of raw materials and freight carriers (if any) will change the way they operate and trade, and that will require a regular market analysis and the final price adjustment. Moreover, companies should not stop at one type of product. Constantly updating the product line and developing new offers is forward-thinking.
It is the ability to adapt to market variability and timely replace outdated models with modern or even brand-new ones that will bring success and profit to the company.

Importance of product presentation

Accurate and detailed descriptions of the product accompanied by quality photos and videos are critical for any successful business. No buyer no matter in which country will buy products that are different from what the packaging says or have no clear instructions for use. These criteria become even more important for overseas sales because while domestic consumers can visit a store and see the product, your international customers often have no choice but to make a purchase based solely on the data from an online store.

Another important aspect is translating the website and social media pages into other languages. As a minimum, it is worth translating these into English as it is a lingua franca as well as languages spoken in the country selected for business expansion. It is also important to be aware of the system of measures adopted there so that specifications could be presented in a format understandable for the consumer.

Marketplace as retailer of future for seller and buyer

Nowadays, retail sales are increasingly done through special platforms, so-called marketplaces. These are sites that aggregate a huge number of sellers and their products. Any company can register and start selling its goods there.
The buyer can compare similar offers and choose the best quality-price ratio. They can pay for and pick the goods up at the nearest pickup point. The most famous giant marketplaces that have become international are Amazon, AliExpress and eBay. However, there are also smaller ones, often specialising in certain products, for example, handmade items only. Whatever the product, the marketplace is a promising area. There are three collaboration options:

  • A marketplace is exclusively used for advertisement: goods are posted on a marketplace site, but to buy them, the consumer is redirected to the seller’s site. In this case, the selling company is responsible for the transaction, delivery, subsequent processing and feedback;
  • The marketplace acts as an advertiser and logistics partner, i.e. after the transaction is finalised, the manufacturer sends the goods to the marketplace representative and is responsible only for their quality and warranty maintenance (if any);
  • The seller provides the marketplace with a certain quantity of goods and further interacts with the buyer only for post-sale customer service;

Revenue is distributed between the goods manufacturer and the marketplace depending on which method of cooperation is chosen. The more functions the marketplace takes on, the greater its share of the proceeds.

Use existing company or open new one?

Consultants unanimously agree that it is necessary to open a new legal entity. The UK provides a wide range of opportunities for new companies, so an overseas branch will benefit from the following:

  • No sanctions on the company’s activities;
  • Simplified system of registration of a new company, reduced red tape;
  • Tax benefits;
  • Free circulation of euros, dollars and other currencies;
  • Possibility to claim tax reliefs;
  • A wide range of available visa categories for employees.

Challenges of business expansion

The international business expansion opens up great opportunities for the company, but the entrepreneur has to do thorough research well in advance. You can do market research, and prepare and submit documents for the registration of the company yourself, but you need to know all the nuances that cannot be covered even in a few articles. Therefore, mistakes are likely to occur, both minor ones when filling in the documentation, and graver ones entailing serious repercussions from the Home Office and HMRC. To avoid them, you should contact immigration advisors in advance. They will help you make a list of the necessary documentation, correctly fill in the necessary forms, and in the future prepare and submit tax returns. Also, they assist employees moving to the United Kingdom for business with visa applications.
With the support of immigration advisors, you can be sure that in the shortest possible time, they will complete all the tasks, impeccably prepare any documents as well as provide competent legal support in all matters.

FAQ About international business expansion

What might prevent the development of an overseas business?

Entrepreneurs often struggle with the following:

  • Customer service: every employee working with customers must be extremely polite, courteous and open to communication. This issue can also include insufficient content on the sales site, for example, raw pictures, unclearly written texts, lack of important specifications, etc;
  • Logistics: the buyer wants to receive goods as soon as possible after purchase, but shipping from abroad may be too long. Tracking is also important to the consumer;
  • Post-sale service including fast maintenance and handling of complaints;
  • Language barrier: description of what is being sold should be written in the required language, complete and without mistakes;
  • Restrictive laws on some categories of goods and mandatory licensing of some of them.

What visas may be required for employees of a new company in the UK?

The United Kingdom has developed a special list of visas that allow to invite the right specialists to the UK for business development:

  • Skilled Worker Visa that requires high qualifications;
  • UK Expansion Worker visa suitable for relocation of the head of the company to solve any arising issues;
  • UK Graduate Trainee Visa;
  • Global Business Mobility visa.

Can a company open a brick-and-mortar store in another country?

Companies are not limited to online sales only. Any company is free to rent a commercial space, equip it with all the necessary equipment and invite potential customers to their store. Despite global digitalisation, many people continue to shop in-store rather than on marketplaces.

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