Whether you have a small startup business or you are well on your way to becoming a household name, for entrepreneurs the thrill is always found in the next challenge. No matter what kind of work you do, setting your sights on the next big thing is totally natural. So if you have cornered the market in Australia, or you think you might have better luck with your business venture elsewhere you may begin thinking about taking your business overseas.
Expanding or starting afresh somewhere else – the result is the same. You will be introducing a whole new market to your brand, your product, and your mission… and yet you might find yourself hesitating. Is it really a good idea to take such a large leap into the unknown?
Well, it might just be the best choice you ever make! Here, we take a look at the many benefits of taking your business overseas, and explore some of the factors you might want to consider before taking the plunge. Are you ready for an adventure? Keep reading to find out more.
The dangers of complacence
Here’s the thing – we’re going to take a much deeper look at all the great reasons why you might want to set up a business overseas. There are some really inspirational benefits to doing this, but if your company is already thriving at home, why bother? You might expand around Australia, perhaps even hopping over to New Zealand… but going further feels like a hassle and a gamble that might not pay off. After all, Aussies are known for innovation and we aren’t exactly lacking in small businesses, right?
Well, there are also a host of challenges associated with running a small business in Australia, some reasons are practical – like a lack of electricity in less well populated locations – and some might seem like things you don’t need to stress over. Even if a lot of businesses fail, yours won’t, right?
Unfortunately, this kind of complacency could lead to failure more quickly than you might expect. Even the biggest businesses and best known brands in the world know that they can’t spin their wheels in one market forever, no matter how successful they are. As a brand becomes part of the landscape, and demographics change and evolve, going overseas could be the best way to keep their revenue up and continue to be a force to be reckoned with.
No matter how big or small your own business is, this is a lesson worth considering.
Access growing areas
While it’s easy to know which countries have the most money (specifically disposable income), it can be harder to track which up-and-coming areas are on their way to impressive economic growth. A little research will lead you to some surprising results that might give you a clue as to where you might want to expand.
Starting out in a growing economy means that you will be bringing your business to a population that has a fresh appetite for new business and exploring new opportunities, and you might avoid setting up shop in an already saturated market. For example, you’d be wise to go elsewhere if you were considering setting up a coffee shop in Shanghai, as you would be competing with nearly 7,000 others!
Another thing to consider is which countries have growing populations, and which could be the best for entrepreneurs. This can be especially helpful if you are a little worried about tackling the unknown.
If you are hoping to take advantage of international investment, then some places offer more than others. Some governments offer special financial incentives to encourage companies to come and set up there. These include places like South America, parts of Europe and beyond, so there are opportunities to be had depending on where you are hoping to do business.
These incentives, as we said, can range from help with setting up your business to tax breaks, easy trading routes, and more. The kind of business you’re hoping to open could narrow your options down, so really take time to do your research on which country could benefit you most when it comes to incentives and opportunities.
Have you ever gone overseas and wanted to purchase something – your favourite meal, for example – and found that you can only locate low quality imitators, if anything at all? Every country has its own amazing benefits, but not all countries have the same development.
If you choose to go to a country where a product like yours isn’t widely known, then you could automatically corner the market. Perhaps you are finding that you get lost in a sea of similar ventures at home – this isn’t going to be such a problem in areas where your offering isn’t as common. Take a look at countries where a business like yours exists fairly minimally and do some research as to why. Is there no appetite for it, or is the absence caused by your industry being underdeveloped there? It might be time to head out and make your mark, just as other Australian companies have done.
Stay ahead of your competitors
Operating in a saturated market is, as we have stated, incredibly difficult and can end up being the fast road to failure. But have your competitors expanded away from Australian shores yet? If not, the time to strike is now. Your direct competitors might not see the advantages of expanding just yet, or be waiting for the perfect opportunity to present itself. By heading overseas and winning that audience now, you will create wider brand recognition and stay one step ahead of your competition – joining the ranks of those who have succeeded by taking a chance.
Diversify and capitalise
Expanding overseas doesn’t just mean getting the edge on your competitors, it also means diversifying your market. If you only operate in one market, failure within that market means that all your revenue will evaporate. But if you have a demographic that exists separately from your domestic base, you can enjoy success even if your domestic revenue is dropping. By accessing fresh territories and a new audience for your services, you will be opening yourself up to more customers, more sales made, and more chances of success that could actually last – giving you global credibility, not just a good reputation on your home soil.
Find the best talent
What are the chances that all the best talent in the world exists in Australia? We know it’s tempting to say “high”, but let’s be realistic. When you take your business international, you can find a whole new pool of incredible talent. Depending on where you go, you might not be fluent in the local language and you may not understand all the nuances of a certain culture. By employing incredible talent in other countries, you can tailor your business so that it appeals to your new demographic much more successfully.
What should a company consider before expanding overseas?
While all those wonderful benefits might have you booking the next flight to another country, slow down. Before you even consider where you might want to take your unique and exciting business, you will need to factor in some key considerations before making the move.
Going overseas with your business is never going to be a straightforward venture – while it will be well worth it, you should really take the time to think about whether there is a market for your business in a chosen country. Even if the answer is yes, is it affordable for you to take this risk?
You will also need to consider things like the legal risks associated with this plan, such as if you will be able to employ people, and the licensing regulations in your country of choice. Is the country economically stable, and are there any political tensions you should be aware of?
Make certain that you take the time to do plenty of research on the expectations and buying practices that your new market has, and think about how you will deal with any cultural differences.
There are even more things to work out, such as what the customs and shipping regulations are in any given country – and how tax laws might impact your bottom line.
Potential tax implications
Since we mentioned tax, this seems like a good time to remind you that Australian tax regulations will still apply to you even if you are working overseas. You will not simply be taxed on your Australian income (if any), but on your worldwide income.
Even if you don’t think this will be an issue for you, such as because you are choosing to live in the country you are expanding to, be careful. You can still experience some serious repercussions if you make a move back to Australia in the future.
There are multiple ways in which Aussie tax regulations could drain your overseas income, so do plenty of reading up on this and think about whether you want to cut your financial, business and personal ties in the eyes of the Australian Tax Office and try your luck overseas, or if you are happy to pay the required taxes to the ATO.
Will you be taking your business overseas?
If the benefits of taking your business overseas outweigh the risks for you, then it might be worth investigating such opportunities in more depth. It could be the best and most exciting business move you have made yet, and might just take your brand global.
Don’t let concerns about Australian taxes hold you back. We know how challenging and complicated finances can be for Aussie expats and business owners with offshore interests. Book an appointment with us for advice on how you can tackle this prickly part of taking your business overseas.