By Guy Rigby, Head of Entrepreneurial Services, Smith & Williamson LLP
We live in a global village where even the smallest businesses can scale their operations up to an international level. For many companies, overseas growth is driven by the ability to access expertise or markets that they might be unable to source domestically. Operations can be structured in a number of ways, all of which come with their own unique challenges and risks. Whichever option you choose, it’s critical to establish clear goals and to align different cultures to create a cohesive and effective team.
Here are some tips on how to take your business global.
1. Leave no planning stone unturned. Identify your objectives and the specific tasks and resources required to achieve them. Decide who will manage your offshore operations. Define timescales and key deliverables. Assess potential offshore models and analyse operational, financial and legal requirements. Establish IT and infrastructure requirements and set KPIs to measure performance and operational success.
2. Consider hiring a local team, as well as their recruitment, training and retention. It’s not unusual for companies to hire expatriates. However, local staff are likely to have better knowledge of the market.
3. Get buy-in from your existing team. Clearly define what’s in it for everyone, what the precise benefits are and why such expansion is required to positively impact the business in the future.
4. Choose the right location. Base your decision on the availability of the specific skills or markets you need. Consider the cost of labour, the travelling costs and accessibility, the time zone and the cultural compatibility.
5. Assess the financial impact. It is not only the benefit of reducing costs that should be considered, but also the revenue-generating opportunities.
6. Consult with your accountants, tax and legal advisers. Setting your business up overseas will involve tax and regulatory implications and you will need to make sure that you will be abiding by the local laws.
7. Think long term. While upfront expenditure on familiarisation, infrastructure implementation and associated set-up costs may be relatively high, this investment may ultimately determine the success of the venture and the return on your investment over time.
8. Don’t underestimate your costs. Factor in some headroom and allow for the costs of communication, training and travelling to meet vendors, customers and potential team members.
9. Make the most of technology to keep costs low. Call employees across the world using least-cost routing; use Skype to talk; host video conferences and integrate databases into one accessible network.
10. Hire incrementally. During a pilot or transitional period hire only your core team members. Then hire the rest of the team once the transfer of knowledge to that team has been completed.
11. Monitor your financial position rigorously and constantly keep your risks under review.
12. Build one team. Factor in the cost of bringing your core overseas team to your head office to absorb the culture, get to know your local team and feel included.
Head of Entrepreneurial Services
020 7131 8213
Smith & Williamson LLP