When to grow overseas
When to grow overseas
When should businesses start thinking about international growth? Ultimately, there must be a compelling reason to expand overseas. A useful first step is to consider where the business wants to be in ten years’ time, and whether goals can be met through domestic growth alone.
To reach the right decision, businesses should look at the dynamics of their target customer base, including its size, growth rate and future spending power. If there are question marks over its long-term sustainability, overseas expansion may offer new opportunities for success.
In many sectors, customers are fast becoming increasingly global. Following key clients into new territories can be a fast-track to overseas success, but risks remain. Assessing long-term sustainability is crucial. If your major customers pull out of the market, will your international operations survive?
Businesses must also weigh up whether UK labour supplies will support growth ambitions. For some, increasing skills shortages or an ageing workforce could become a barrier to long-term growth. Moving certain operations overseas may allow companies to access to a larger, more sustainable or cost-effective talent pool.
While many will never feel completely ready to expand internationally, the right timing remains important. Early losses are likely when entering overseas markets. To ensure success, businesses must confront some uncomfortable questions: Will we be able to absorb international shortfalls? Can we afford to fail?