There are two main ways to expand a company – buy into another company or expand your own operation. Buying is generally quicker but can be risky. Expansion is generally cheaper. How do you expand with less risks in an expedited way? In this article, we propose expanding internationally with a trusted team of advisors. Other regions can easily be abroad by trading over the internet. 

And if you expand successfully, you may attract purchase offers for your assets or company by another group looking to expand their market share and perhaps their know-how using yours. 

Specialist Team

Trusted advisors are those with international experience, regulated, provide quality service at a reasonable rate. An agreed fixed retainer basis is one way of controlling the billings, you don’t pay for unexpected hours, you don’t pay at all if you didn’t receive the agreed service. 

How do you expand your business internationally? Here are a few general tips to include in your business plan and check as necessary with your trusted advisors. Here’s a spoiler: planning helps. So does planning how to deal with surprises – it can soothe busy business people. 

Key Areas for Your International Business Plan

• Demand: Where do you anticipate a good demand for your products or services? Where do you have a competitive advantage? Can they be easily shipped or supplied over the internet(e-commerce)? Do you have local contacts who can act as re-sellers, provide any needed support, provide any storage, etc? Plan where you can sell more most profitably. Plan your points of sale. Plan your marketing strategy i.e. informing potential customers you and your product merit consideration…..
• Culture and language: Are you in tune with the local language and culture? This is necessary to build up your reputation. You can’t market or sell to far-off locals in the wrong language, on the wrong day or are insensitive in some other way. Good intentions alone won’t clinch the deal. Where there are wide cultural or linguistic differences to bridge, you probably need local contacts with the language or culture who are hungry to assist you. Plan how to address cultural and language aspects.
• Personnel: If you supply over the internet you probably need less personnel but not zero personnel. AI cannot do everything, it is only as good as its programming when it is plugged into the electricity network. Personnel are needed to produce, sell, answer questions, provide technical support, find things that didn’t yet arrive,  fix invoicing errors,  deal with administrative and logistic matters, and much more.  Plan how to recruit the right people and build a spirit of teamwork – from salary to treats to training to ESOP plans, etc

Getting the Foundations Right: Premises, Legal, and Finance

• Premises: Your personnel can do a lot from home, but hybrid work has its limitations. People sometimes disappear when they think they aren’t needed. Creativity and spontaneity are said to work better when personnel are together. Some things can only be done from office or commercial warehouses. For example, products sold by e-commerce need to be stored in warehouses with warehouse personnel – will robots select and pack the right blue product instead of a green one? Business meetings need premises. R&D need laboratories or other appropriate work premises. Plan your building requirements, premises are part of your tools for the job in hand.
• Legal aspects: What is needed is law and order in the sense of orderly contracts, orderly compliance with relevant laws in each country, etc. Lawyers contribute to the smoother legal running of a business. Plan whether you need to outsource your legal requirements in each country or whether you now need an inhouse legal department or a combination. 
• Finance needed: Every business needs assets, personnel, good management and finance to pay for it all until sales revenues do. Plan your cash requirements and timing based on predictions of demand and other factors.  Then plan what happens if you under or over predict i.e. plan for surprises. And install a good accounting system and finance team. One of the reasons that communism collapsed in the 1980s was that profit and finance were not properly tracked.

Navigating International Taxes and Risks

Every country has its own taxes. Taxes should be treated like a necessary expense, not forgotten. Tax evasion is not recommended –  tax authorities are using electronic and other means to spot it far quicker than in the past. People are often surprised by the range of taxes in foreign countries. The range of taxes can wipe out profit. So can double taxation if an item is assessed to multiple taxes, in different years, on different amounts, etc.

International tax planning is vital, unfortunately many accountants and lawyers don’t specialize in the interaction of taxes imposed by different countries (or states/provinces). International tax advisors are a must for any expanding business.

Some key questions to ask are:

• In the US, are you liable to state sales taxes as an out of state supplier following the Wayfair Case a few years ago? 
• In the EU, UK and many other countries, do VAT or other taxes apply to goods and certain services (SAAS sales as a service involving minimal human intervention) ? 
• Can you register in one EU country and pay VAT applicable to your sales in all 27 countries? 
• Will having a local “dependent agent”, warehouse or subsidiary trigger a taxable local presence (permanent establishment) for your ecommerce operation in a country where you are not physically present?
•  Does the OECD Multilateral Instrument (MLI) help?

In short: international tax advisors are a must for any expanding business

Risks

There are risks in almost any business, but the rewards are what interest expanding businesses. Risks can be minimized by engaging trusted advisors.

Conclusion

We at Advisors.biz want to help your business expand internationally.  Smart selling over the horizon is part of the deal.Contact HQ@Advisors.Biz