Looking to expand overseas? Here are some key things to consider
Expanding overseas can be an effective way of broadening your potential customer base and increasing profits.
However, while there are numerous benefits associated with expanding to reach global markets, it pays to get strategic advice to overcome challenges, according to CenturyLink.
Stuart Mills, CenturyLink regional director ANZ, says, “The list of considerations for local companies looking to expand overseas is massive: there is always something new to consider.
“The key ones can be broken down into four main categories: taxes; IT systems; privacy; and cultural expectations.
“By spending time developing a strategic plan to deal with each of these areas, companies can improve their chances of expansion success.”
Australia’s corporate tax rate is relatively high and can be unstable, putting Australian organisations at a comparative disadvantage, CenturyLink says.
To avoid ‘falling foul’ of the Australian Taxation Office (ATO), companies should ensure they have adequate reporting systems and capabilities, and clearly understand their obligations.
This can include putting enterprise resource planning systems in place, and working with reputable tax advisors to avoid errors, the company says.
2. IT systems
Managing IT systems across different countries, with their different time zones, connectivity capabilities, and market expectations, can be difficult.
Maintaining hardware and delivering software upgrades are relatively simple when the company is located in a single country but complex when other countries become involved, says CenturyLink.
To simplify IT systems management and maintenance, companies should consider putting as much of their infrastructure and applications as possible in the cloud, and selecting a partner that can offer standardised solutions (including co-location, managed IT services, or cloud) around the globe.
This minimises the amount of resources required on the ground at overseas locations, and avoids having to work with different local companies in each country who won’t be able offer a standardised solution, according to CenturyLink.
Sharing information, which is often confidential or sensitive, quickly and securely may present difficulties depending on the country the organisation is operating in.
Companies should consider a file-sharing solution that lets them avoid using email to share files within or outside the organisation, according to the company.
Companies must also remember that complying with local privacy laws means they must store data appropriately.
Selecting the right data centre provider depends on where the data needs to be stored, how flexibly the service can scale up and down, how reliable the service is, how quickly new infrastructure can be deployed, and how financially and operationally stable the provider is, CenturyLink says.
Mills says, “Australia’s privacy laws are amongst the strictest in the world, making it an ideal location for multinationals to store data. If they comply with Australian laws then they are likely to comply with the laws in most other countries.
“CenturyLink recently extended its data centre footprint into Australia, reducing cost and uncertainty for Australian companies looking to expand overseas.”
4. Cultural expectations
In many countries around the world, even those that seem culturally similar to Australia, cultural expectations can trip up business managers and, potentially, cause significant problems.
Simple things such as dress codes, how to run a meeting, and even how to say no to a potential business partner can become complicated when doing them across cultures.
Businesses should seek advice from experts to ensure they meet the cultural expectations of the new location, CenturyLink recommends.