Whether you’re already a successful entrepreneur or you have a bright idea for a venture, it can be difficult to know where best to incorporate your business. Granted, you may naturally want to start up on home turf to test the waters, but home turf may not necessarily offer the best return on investment or put you in touch with the right contacts to take your business to the next level. As the world becomes increasingly globalized and businesses look to foreign markets to secure their growth, there has been a huge influx in entrepreneurial tourism and expansion, and as such, taking time to consider your options before starting makes sense…
Economic uncertainty threatens markets
Perhaps one of the most logical reasons for the rise of foreign entrepreneurship is that some of the world’s most stable and lucrative markets are now under threat. Both the United States and the United Kingdom have suffered significant political and economic turmoil in recent years, whilst China, which was once considered an economic golden child, is also set to report slower-than-anticipated growth. Entrepreneurs can either rest on their laurels and hope for the best, or they can incorporate internationally and see what potential they can find and exploit to not only take their firms to the next level but to reduce the economic risks of having all of their eggs in one basket. Overreliance on a single market is bad for business.
It’s easier than you might think
Once you have assessed levels of demand for your products or services in another country, you’ll likely begin to research into visas and weigh up the pros and cons of your decision to move abroad, but this is the stumbling block where many entrepreneurs fall down. And that makes sense – expanding into a new territory can be alien and scary, as you’ll have to risk losing out on opportunities in your home country, and adapt to life in a foreign market.
But the truth is, company formation is a simple and straightforward process in virtually every market, and governments in many territories actively encourage foreign investors to set up shop, offering taxation perks and benefits to those to do. With the right support and strategy, you can go from your initial business idea to trading in a foreign market in less than a month, and it doesn’t have to cost you thousands of dollars, either. International expansion certainly isn’t anything new, but with technological advances in the past decade, entrepreneurs are taking their brands international more quickly and efficiently than ever, so ride the wave!
Startup hubs serve as Petri dishes for success
Another common reason for entrepreneurs to expand internationally is to take advantage of the growing startup hubs around the world. Forget Silicon Valley – Chile has a number of startup hubs that are not only home to million-dollar businesses but attract the attention of some of the world’s biggest venture capitalists. Granted, you need to work hard if you want to compete, and the cost of living in such cities is often higher than elsewhere in the country, but if you want to be where the action is happening, it’s a wise business decision to invest in such a location. It can also breed success – being surrounded by growing businesses helps.
Mexico is another country where many businesses go to flourish, with entrepreneurs in the fintech and tourism sectors heading to Mexico City as their startup destination of choice. With many successful startup businesses in Mexico, like WePow, which connects recruiters and candidates through an easy-to-use mobile app, and Kueski which is an online lender, it is easy to make your mark in the region, and indeed piggyback off of the success of other businesses, especially if you’re looking to secure investment to grow or scale your concept.
Trade agreements can boost sales
Depending on where you are in the world, being able to capitalize on trade agreements and deals could serve as another reason to expand internationally. Rather than suffering expensive trade tariffs and barriers to entry, expanding into a market where those barriers don’t exist makes sense, especially if you’re selling products on a global scale. Latin America is a popular choice, boasting a number of free trade agreements that support businesses both locally and internationally to expand in the region and sell their wares to markets such as Australia, Europe, the United States, and Asia, with a growing number of FTAs and blocs.
Indeed, Australian entrepreneurship in Latin America has been on the rise for a few years, with many Aussie citizens understanding the benefits of LATAM – despite being thousands of miles away. Exports and imports between Australia and Latin America doubled in the period of 2004-2010, and last year, the Trans-Pacific Partnership (TPP-11), a trade deal between 11 countries, including Australia, Chile, Peru, and Mexico, was drafted and signed, which will no doubt have a lasting impact on investment and trade between the two partnering territories.
Opportunities abroad increase ROI
Finally, don’t underestimate international demand for your products and services, particularly if you’ve struggled to penetrate the market at home or demand has fallen as the market saturates. It’s easy to assume that your business and brand is dead in the water, or even that you are going to struggle to replicate the success of your venture in another market, but consumers are increasingly looking to expand their vocabularies, tastebuds, and experiences and are willing to experiment with products from other countries and regions, particularly if you brand is authentic and your products bring something new to the table.
The explosion of Peruvian cuisine over the past couple of years is a testament to that, with New York, Lisbon, Copenhagen, and more all investing in Peruvian-style foods and eateries to appeal to consumers’ changing food habits. Spot a gap in the market to bring your culture and products to a new market, or indeed bring another culture into your home country, and you could be on to a winner – but the key is to act fast and exploit opportunities before your competitors stand a chance, particularly in cut-throat sectors like food, fashion, and tourism.
There’s no denying that establishing your business abroad carries risks, but no successful entrepreneur would be where they are today without some element of risk. Analyze potential opportunities wherever they may be and exploit them. There’s a whole world out there!