5 International Expansion Strategies that Work

Expanding across borders is no easy task, especially for small business owners. To successfully enter an overseas market and grow your business presence, you will need to create an international business expansion plan that both meets your organization’s specific needs and takes into account the new market. Otherwise, you risk sinking valuable investment capital and slowing long-term growth.

Why is Global Expansion Important?

Global expansion enables businesses to hire top talent, expand their customer base, diversify their market presence, and make a positive impact on an international scale. International expansion will give you more business opportunities abroad when performed correctly. 

How Do You Determine Your International Growth Strategies?

At some point or another, almost every scaling company will expand internationally. You will base your global expansion strategy on your business’s unique situation.

Determine International Expansion Strategy Goals and Budget

Expanding internationally means something different for every one business. Large corporations and major enterprises might want to start selling their products or services in a new market because they see an opportunity to win customers and beat out the competition. Small businesses and scaling startups, on the other hand, are running on more agile business models, which means they probably are looking to mitigate risks by testing out the global marketplace. 

As a business, you will need to set your budget by asking yourself the following:

• Do I need local legal, accounting, and employment experts?

• Will the organization need to build a human resources team?

• Are we looking to hire talent across borders?

• How important is our brand abroad?

• Who is our target audience?

If your goal is to grow your customer base, then establishing a subsidiary, branch, or entity in a new country might make sense.

Businesses launching physical products and services into a new local market, on the other hand, will almost always need a physical presence as well as a way to understand cultural differences.

Tip 1: Research New Markets

When it comes to selling products and services, what works in one country might not work in another. This is why you need market research before building your global expansion strategy. You will need to segment and analyze your market abroad to understand your prospective customers. Understanding consumer attitudes and cultural nuances is crucial for developing a marketing strategy and building brand awareness. What are their values? How much are they willing to spend on your product or services? Do your products and services align with the proposed value?

Some businesses plan to expand into certain overseas markets because none of their competitors have a presence there. However, being the first business of its kind in a new market can sometimes be more difficult, since you won’t be able to establish clear benchmarks, or understand if there is even a market for your products or services. What sells easily in the US or Canada might not in Mexico or Brazil.

Tip 2: Make Data-Driven Decisions

If you’re entering a new market with competition, then you can perform a more robust gap analysis to determine what your competitors are already doing, and what types of services and products customers are looking for. You will need to set KPIs in each country, re-envision your local PR strategy to match the new market’s culture, and determine your specific position.

Most importantly, you will want to keep in mind the overall economic forces in the country. Is there a recession? How is inflation impacting overall consumer trends? Are there other resources you will need for your global expansion strategy? Is there anything else you need to consider? Many businesses are struggling while expanding abroad because they don’t make data-backed decisions or set clear quantitative goals.

Tip 3: Localize for Your New Market

One of the biggest challenges for expanding businesses is localizing their services, marketing, and employment benefits for the new market. Many businesses think they can take the same approach towards expanding in each new market, but this is simply not the case.

If you’re expanding into a new country, you will need to modify your website and marketing strategy for the new market. As a high-level example, US-based companies expanding in Brazil might need to translate their website and marketing materials into Portuguese.

For businesses looking to hire employees in new target countries, localizing compensation and benefits packages is essential. This means paying employees in the local currency and offering in-country benefits. The process of navigating local benefits is complicated, which is why partnering with Justworks for our all-in-on solutions ensures that you’re offering the right benefits – even for your employees abroad. 

Tip 4: Understand the Pros and Cons of International Growth

As your business expands internationally, you will need to make sure that your company maintains international compliance. Otherwise, you might find yourself facing lengthy lawsuits, costly fines, or even a suspension of your business license.

Expanding abroad presents complex international compliance challenges due to varying regulations across countries in areas such as data privacy, labor laws, and health insurance. Requirements like the General Data Protection (GDPR) in Europe demand strict handling of employee data, and non-compete laws differ widely, affecting employment terms. Localized rules for employee benefits, contracts, and taxation further complicate compliance, especially in regions like Brazil or Europe where labor laws are comprehensive. Managing these diverse standards requires an understanding of local regulations and potential compliance risks, making it critical for businesses to consider partnerships with global experts like Justworks to ensure compliance and mitigate risks. 

Tip 5: Embrace Remote Work

Maybe you want to build a sales team that understands the local culture in a new country, hire employees with a robust network in another country, or build a customer support team in another time zone. Remote work has made going global more important than ever before.

The larger the global talent pool, the better chance you will find teammates with niche skills.

While businesses were able to identify top talent in new countries, many of them did not have the infrastructure in place to hire, pay, and care for full-time employees or pay international contractors.

The Bottom Line When Expanding Internationally

No matter what approach you take, forming strategic partnerships abroad, from partnering with an EOR to acquiring or merging with a foreign business, is crucial for your international business expansion strategy.

Expanding abroad will come with its own challenges, so you will need to adapt quickly and restructure your international corporate organization around new global objectives.

Most businesses, and especially startups, are used to putting out fires in their country. While expanding abroad, that approach simply won’t cut it.

Justworks Can Help Manage International Expansion

Expanding internationally opens up incredible growth opportunities, but it also comes with complex compliance requirements, from navigating labor laws to understanding local tax and benefits regulations. Justworks can help you cut through the complexity, ensuring you’re compliant and minimizing risk in each new market.

With Justworks, you’ll have a dedicated partner to handle the operational side of international expansion, so you can focus on growing your team and your business. Let us make global hiring simpler, smoother, and more secure — wherever your next opportunity takes you. Learn more about how you can expand your international business through Justworks, and get started today.