The 6 most important reasons to expand your business internationally in 2021

Despite all travel restrictions due to Covid-19, a report by CFO Research found that 45% of respondents are currently or plan to expand their business to overseas markets. While the study found that capturing larger market share was the main driver behind international expansion, there was also an interest from companies to increase sales, diversify investments, and attract talent from around the world.

While companies are largely inspired to launch international business expansions to generate more revenue, there are several benefits to changing your business model and going global. Not least because the Corona crisis has opened a new digital age that makes it even easier to get in touch with potential customers abroad.

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What are the advantages of international expansion?

Take a look at our top 6 reasons to go global:

  1. New sales potential: By expanding your business model to new overseas territories, you gain access to a whole new audience, that is, millions of potential new customers and more sales.
  2. More investment options: Moving your business overseas can attract international investment and take advantage of opportunities that the UK may not have. For example, many governments offer incentives for companies to do business in their country.
  3. Diversify corporate markets: By entering new markets, you are helping to create a safety net for your source of income. For example, if sales in your home market are declining, rely on profits from sales in other regions.
  4. Access to a larger talent pool: An international talent pool means you can localize your business to better serve the needs of your new market. By employing local workforce with native language skills and diverse professional backgrounds, your company will have the local expertise and experience needed to serve your new customer base.
  5. Overtake the competition: If you can target a foreign audience, you could gain a competitive advantage by leaving a saturated market to a place where your competitors are not doing.
  6. Global brand presence: By successfully establishing your company internationally, you not only gain new customers, but also strengthen the reputation of your company and gain credibility.

What should a company consider before expanding abroad?

There are several factors to consider when planning international business expansion. It is important to think about market attractiveness and whether your product is suitable for the country in which you plan to sell.

  • Affordability
  • Legal and compliance risks including task and employment regulations
  • Licensing
  • customs Service
  • Shipping, fulfillment and returns
  • currency
  • Taxation Requirements
  • Competitive advantage
  • Cultural differences and language barriers
  • Economic and political stability
  • Customer service expectations
  • Buying habits

For more information, take a look at our top 3 things to consider when going global.

How to choose a country to expand internationally – the opportunity for emerging markets

By shifting towards fast-growing emerging economies and away from underperforming developed markets like the Eurozone, UK companies could see significant trade-driven growth going forward. The emerging economies account for around 34% of total global GDP (gross domestic product), and globalization is not just a trend, but a necessary prerequisite for international expansion. The leading emerging markets include China, India, Russia and Brazil. China and India have enormous potential for international business. This is why they are so attractive for companies that want to expand internationally:

China

China has experienced exponential growth in the past few decades, breaking the barriers of a centrally planned, closed economy and becoming a manufacturing, export and consumption center of the world. Doing business with this large and complex marketplace is vital for many companies that buy and sell internationally. Furthermore, the shift in the Chinese economy away from trade-driven growth to consumption-driven growth could offer significant opportunities for several export sectors where the UK has strengths, such as luxury goods and financial services.

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India

India vied to become the “next China” as a success story in the developing market and has become the fastest growing major economy in the world, contributing nearly 3.2% of world GDP. With strong infrastructure growth fueled by rapid urbanization and robust acceleration of production, India is fast becoming a frontrunner among emerging economies. India is the UK’s 15th largest trading partner and accounts for 1.6% of all UK trade. Even with its huge population, India offers robust market opportunities for companies considering international expansion.

Expand your global reach with WorldFirst

With the WorldFirst International Collections Account, you can turn your small business into a global business. Reach new international markets by paying in local currency quickly and easily. As your international business expands, you can always return your earnings through our 24/7 online dashboard. Ready to enter a new foreign market? Register online today and you will be up and running with your account in a matter of hours.

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