If you’re thinking of starting a business overseas, there are a lot of factors you’ll need to consider. Starting a business is challenging enough, but when you’re dealing with foreign laws and culture it can become so much more complex.
To help, below you’ll discover the 4 biggest risks you need to know when setting up a business overseas.
1. Issues with currency exchange.
One thing you might not have considered when setting up a business overseas, is foreign currency exchange rates. If you’ll still be based within your home country, you’ll be taking international payments. This means, each time you get paid, a currency exchange rate will be applied.
The trouble with this is the rates can change on a frequent basis. They can go up or down, which means some months you may earn less profits simply because of the currency rate fluctuations. This is definitely a consideration you’ll need to make. Finding a cheap currency converter and taking down payments when currency rates are stronger, will help you to avoid the challenge this can bring.
2. Failing to attract customers.
A more common challenge you’ll face is finding customers for your new business venture. Finding customers in a completely different country, particularly if you aren’t based there, can be difficult.
You’ll need to have a good understanding of the local cultures and customs. This will inevitably impact how you should be marketing to your target customers. You can hire locals in the country you’re trading in to take care of the marketing side of things for you.
3. The legal risks.
One of the biggest risks you’ll definitely want to plan ahead for is the legalities. Different countries have different laws and regulations in business. In order to avoid potentially costly fines, it’s important to familiarise yourself with the legal risks. This is where risk consultants RSM can really come in useful. Seeking advice from a specialist company will ensure you minimise the risks involved significantly.
4. Communication problems.
Finally, you’re going to find communication a lot more challenging. So, if you rely upon international teams to run the business across borders, you’re going to want to invest in good communication solutions. The good news is, there are lots of tolls out there which can help these days. Instant messages, emails and free international phone calls can all help you to keep in touch with remote teams.
If you want your business to succeed internationally, you really do need to do your research. The above are just 4 of the risks you’ll face when trading internationally. Planning ahead will help you to avoid them and see a much smoother start-up period.