You will experience some level of risk across all areas of your business globally, but moving your company offshore is one of the trickiest, yet possibly most rewarding things you can do. Businesses often falter because thorough preparation and due diligence haven’t been carried out prior to moving, nor processes or risks effectively reviewed and monitored on an on-going basis for effectiveness.
key considerations when entering, and continuing to operate in, new jurisdictions:
Making the wrong assumptions
One of the main risks with international expansion is assumption. Not everything is the same and every person and every jurisdiction will operate differently. While consistency is key, understanding is the tool you need in to not only survive the international expansion, but to succeed.
Failure to understand
Do you really know your business? Do you really understand its day-to-day workings and what the core objectives are? Do you really know how effectively your risks are being managed? Without having a detailed grasp of your company, how can you plan and mitigate any future issues?
It is imperative that you share information and processes across your company. Failure to think about the integration of systems and whether technologies will connect with each other, can be a major problem. You need to think about what the business goals are and what resources you will need across different global markets. Without this standardisation, teams won’t be able to reach your expectation and will feel frustrated or undervalued.
From this, there are a fundamental list of questions to ask yourself:
- What are the legislative changes in the region you are moving to and do you know all the rules?
- Do you understand the cultural risks and how do you blend multiple cultures together?
- Understanding compliance and expectation is different - do you have the knowledge to succeed with both?
Data and privacy
Technological and data risks are a major struggle for businesses considering international growth and operations. The GDPR changes across each jurisdiction, bring its own set of issues, with each country adhering to its own rules.
While the European Union’s GDPR regulations will still apply to the UK, no matter what the Brexit outcome, other countries manage data privacy differently. For example, new US and Canadian data systems are extremely complex, making it a challenge for UK businesses who have only just wrapped their heads around our own laws.
You need advisers that not only understand this but can work with local teams to navigate these risks.
With all of this in mind, how do you mitigate risk? - Process, data, and standardisation
As a business, you must look at what the region is like internationally. Sharing ideas, data and processes between countries may be challenging but is necessary to combat failure. Technological and cultural processes will look different in each area, so you need someone you trust on the ground.
You may have a big team both at home and locally; communication is vital to standardising processes and technology to ensure uniformity and efficiency. ‘If there’s no conversation between the two, when you have large teams on the ground both at home and away, that’s where the problems start. There will be a misunderstanding over expectations and it goes downhill from there.’
How well does a business understand its own risks? This is where we come in
Often, expansion is more complex than first imagined. There needs to be clear combinations of teams, to utilise UK advisers as well as local contacts to bridge the gap between language barriers and cultural differences.
Simply put, if you are unable to grasp the expectation or size of the job you have taken on and you lack clarity about your core business, environment or infrastructure, you cannot expect it to be successful. How can you control something you don’t even know about?