When you can no longer grow upwards, you grow outwards. This has been the mantra of business leaders since time immemorial.
When you have reached critical mass in your home market, it’s time to consider global expansion. What’s more, you don’t need to be a Fortune 500 CEO to expand business operations overseas. Even SMEs can go from minor to major by establishing a foothold in another country.
Perhaps this is why US companies are feeling more positive than ever about international expansion, even as the economy at home falters. But which option should you use to expand internationally?
There are many ways to do it, some of which will be better for your company than others. Read this two-minute explainer to find your approach to market expansion.
Keep It Intimate
For smaller companies or those just entering a rapid growth phase, it makes sense to expand in a low-risk way, ideally into familiar territory.
This means choosing a market that is geographically close (such as Canada). Or one that shares a very similar language, legal system, and business environment (such as the United Kingdom).
In this case, you might want to keep it all in-house. This means using your own people to scout out opportunities and begin the work of setting up your overseas location.
This is often the slow road to expansion. It is taken with baby steps until you are confident that you can invest serious resources into your budding global operation.
Use Local Experts
Another popular option is to hire expert agencies with a presence in-country that can take care of all of the legwork for you.
The most common approach to this is by using a global PEO (Professional Employer Organization). But what is PEO all about? These are agencies that take care of the most important part of your overseas expansion: the people.
They are responsible for recruiting local talent, establishing payroll, and navigating foreign labor laws. This is all to ensure your overseas expansion goes off without a hitch. You can read more on global PEO here, to see whether this more hands-off approach is right for you.
The Franchise Option
If your company already has strong brand recognition and is home and overseas, you can go for the most hands-off option of all: franchising.
In this case, you would essentially sell licenses to your business to overseas entrepreneurs or investors. They would use your name and logo, sell your products and services, and cut you a share of any profits in exchange.
In a franchising situation, you won’t have to do as much work to see your business expand overseas. However, you’ll also have comparatively little control or oversight of those foreign operations.
Which Option Should You Use to Expand Internationally?
So, which option should you use to expand internationally? Consider these three options as being best suited to small, medium, and larger companies, in that order. However, this is not an iron law.
For some smaller companies, franchising might be a way to expand overseas without using major resources. At the same time, larger companies might be more interested in the intimate approach, if they wish to retain as much control as possible over their expansion.
While you’re considering which one is right for you, we’ve got some food for thought. In our Offices section, you’ll find an ocean of inspiration for your overseas expansion, with examples of growing companies that have gotten it right. Check it out.