Going global is a big achievement for any business owner. It offers hefty benefits, from extending your reach to growing your customer base and opening long-term growth opportunities for your business. However, you must also be ready for challenges like scaling your organization to an international level, understanding the local market, and dealing with foreign laws. Each challenge elevates operational costs and pinches your budget in some way. Fortunately, there are actionable ways to cut costs without compromising your global outreach plan. Let us explain some proven money-saving strategies to help your company sustain the financial pressures of going international.
Research before spending
Experts recommend conducting thorough research before spending a single dollar for your global initiative. It is tempting to dive in without doing your due diligence when you are enthusiastic about breaking into a foreign market. But you may end up straining your budget or making wrong choices by acting in a hurry. Research the companies you want to engage with. Double-check deals before sealing them, even if they sound to be good. You may find suppliers offering better prices and buyers ready to pay more on digging deeper. Compare regions while picking markets to sell or order goods from. Good research before making any deals gets you in a better place.
Hire locals for your team
Wherever you operate, you will need a team to manage various processes and functions of your business. Although the idea of exporting your workforce overseas sounds great for global entrepreneurs, hiring locals is a far better option. You can save a fortune on travel, accommodations, and immigration expenses. Hiring local employees empowers you with local expertise and a first-hand understanding of the market, customers, and culture. It gets even better if the wages at your new destination are lower than in your country. You can collaborate with a local recruitment company to get suitable talent for your business.
Prepare for customs charges and taxes
Trading overseas makes your business subject to several expenses, including customs charges and regulatory taxes. The best option is to research them and prepare for them financially. Duties, charges, and taxes differ from country to country, so you cannot take a one-size-fits-all approach to them. Dig deep into the country-specific norms to ensure you do not face shipping hassles. The good thing is that you have options for duty and commodity tax recovery if you overpay due to regulatory changes. Connect with a customs broker to help you with recovery as it can save you a hefty sum. The apt guidance also enables you to ditch fines and penalties.
Build relations with like-minded people
When exploring new international markets for export and import, consider building networks and relations. You cannot step into an overseas market without local support, so make sure you get enough of it. Reach out to like-minded businesses at the destination. The right partnerships can open cost-saving benefits for you. Likewise, you can find similar enterprises back home and join hands with them for cost savings. For example, you may buy together in bulk to get better prices and volume discounts. Consider sharing transport costs to cut down overall expenses of foreign trade. But make sure to have a clear agreement with the partner to avoid disputes down the line.
Leverage remote working
The good thing about the new normal is that international businesses have immense cost-cutting opportunities due to remote working arrangements. You need not set up an office overseas or hire a team to handle the administrative functions. Rather, you can run them with a remote team working from your home base. It enables you to save massive amounts on rent, utilities, office supplies, furniture, infrastructure, and more. Thankfully, technology makes it possible, and the pandemic has already made everyone comfortable with the WFH model. You only have to ensure that your team has the basics to facilitate collaboration and communication. Not to mention, they enjoy a better work-life balance and deliver higher productivity while working remotely.
The costs of establishing a business overseas or expanding to foreign markets often sound daunting. But it is easy to manage if you take a strategic approach to money management. You need not be a financial genius to achieve the growth goals of your business without pressing your budget too hard. Try these simple measures to stay ahead of cost-cutting and achieve global success without spending a fortune. The sooner you have them in place, the less expensive it is to set up and run an international venture.
Photo credits: eOffice