3 Major Challenges for Businesses Going Global (and How to Overcome Them)
Going global offers huge opportunities for growing businesses. But is your business ready?
If you’ve seen a measure of success locally, it might be time you consider taking your small business further. Operating internationally is exciting and provides countless new opportunities. Going global gives you access to faster growth, diversification, and a much wider customer base.
But going global comes with many challenges, some of which might offset the gain. You need to know if your company is ready to face those challenges, and how to overcome them when you do.
Is your small business ready to go global?
Deciding whether your small business is ready to go global will take a lot of insight into both your business and the international markets. The following questions can serve as a guideline in making your decision.
Have I built a solid foundation at home? If your answer to this question is not an ambivalent yes, you’re probably not ready. Going global should be a means to expand an already strong business, not an attempt to increase a small customer base.
Do I understand the competition? Your business may be doing well at home, but the competition abroad might be too much to handle. The players in your industry might work to an entirely different beat. If you don’t understand the competition, you’ll land up fighting the wrong battles.
Do I understand the cultural differences? The culture in another country will be a factor in getting your business running, as well as understanding the sales process. If it’s too different from your own culture, your business plan might not be viable.
The three global challenges
Once you’ve decided to go global, you need to be aware of the challenges you’re going to face. These are six of the most common challenges, as well as how to overcome them.
1. The language barrier
Perhaps the most obvious challenge you’ll face in going global is the language barrier. You’re used to operating in English, with English-speaking customers and English-speaking partners.
And you’ve certainly prepared for this challenge. Yet how prepared are you within your own team? Although you have translators doing excellent work, details can get lost in translation, and when you need to give specific instructions, communication breakdowns are likely.
Remedy: You’ll never entirely root out miscommunication, but you can minimise it by writing instructions down. It’s much easier to be specific in writing, and your team will be able to take the instructions with them.
2. Legal issues
Since you’re established at home, you will have gained a firm grasp of the legalities surrounding business practice. Your processes are probably adapted to them.
Suddenly, you’re in a world of differing expectations. What worked at home won’t work here, and your systems are no longer viable.
Remedy: Get a lawyer to walk you through all the appropriate laws so that you’re at least familiar with them. Hire someone to be on the job full time, to adapt your systems and pick up on whatever you missed.
3. Fluctuating exchange rates
At home, you know exactly what your targets are. You have a clear budget for your expenses. For the fiscal year, all of that is relatively static.
But when expanding internationally, you run into the problem of fluctuating exchange rates. Expenses that haven’t changed in the foreign currency all of a sudden cost significantly more, based on unanticipated growth.
Remedy: Foreign exchange companies have different services which let you prepare for this inevitability. Termed forward contracts, the company will allow you to set a fixed exchange rate at the current value, for an agreed period of time. You’ll lose out if your own currency strengthens, but this way you can accurately anticipate your budget needs and targets.
Ready to go global?
Hopefully you now have a clearer idea of whether you’re ready to go global. There’ll always be challenges particular to your company, but going into the venture with an understanding of what others have faced before will bring you much closer to success.