Risks in Business: Mitigating Risk in Business Expansion & Growth

Mitigating the Risks of Global Business Growth

If your business is performing well, plans for expansion might be the next step in your business strategy. Global business growth is a very attractive prospect for a business owner - so much so that its merits have the potential to far outweigh the risks of expanding a business.

 

We'll take a look at why you should consider expansion to international markets and reap the benefits, whilst limiting the risks in business growth that you're likely to face.

Why Expand a Business?

Introducing your product into a new market in a new location is a way to keep your business profitable. If the current market you trade in is saturated, you can grow your customer base and potentially increase revenue opportunities by tapping into new markets internationally.

 

Expanding your business to international markets is also an opportunity to establish global awareness of your brand. By building up a recognisable brand in multiple countries, you may have the opportunity to establish a good reputation for quality products and great customer service, which is likely to open doors for you in other countries.

 

So, it could make good business sense to enter an international market, but how can you minimise the risks associated with expanding your business?

 

Do Your Research

Conducting research can play a crucial role in identifying the benefits and risks of expanding a business to a particular location. Some factors that you may want to consider include:

 

  • The Local Business Climate

Check whether there are already businesses in the local vicinity who sell products like your own. In a similar vein, you may want to check that the region is accepting of overseas companies, as this could affect your sales.

 

  • Market Research

Research can help you to identify the best location for your product to penetrate the local market and grow. By conducting market research, you can have the opportunity to identify where your product will be in demand, avoiding the risk of lacking customer demand in an international market.

 

  • Exporting

You may want to take a look at the export/import regulations of the country you’re hoping to expand to – as there are different rules for different nations. Also, you may need to adapt your product accordingly and consider the branding – could any of the colours or symbols used be more appropriate for certain audiences? Good research can give you the tools to reach your business potential.

 

Stable and Effective Management

Choosing the right people to invest in could make all the difference when protecting yourself against the risks of expanding a business. You may want to use the expertise of a good lawyer or accountant to help you limit any risks and protect your business against financial loss.

Using these professional services can also be complemented by the commitment from the rest of your team members. A larger, international company is likely to operate differently than a small to medium enterprise (SME), so this should be taken into account when managing the expansion strategy. This may involve implementing more efficient ways of working or holding additional training for your team.

 

Growth Strategies

Entering an unfamiliar market can open up competitive risks and it is important that you consider a strategy for business growth. Each of your offices and your team members can be geared towards running efficiently to meet the challenge of direct competitors in a new locality. Here are some strategies you may want to adopt that could protect you from the risks of business expansion.

 

  • Establish Overseas Connections

You may decide that making connections overseas is the best way for your business to proceed with mitigating risks in business expansion. Having a knowledgeable partner or business associate could give you the information you need on the culture, the market and the working practices when expanding globally helping your build your expansion plans with the right insight and knowledge.

 

  • Find the Right Services

Think about investing in reliable services, where you can rely on their expertise to help your business run efficiently. For example, using an international courier like ourselves means that deliveries are one area that you won’t have to worry about as you have outsourced it to experts in the industry.

 

  • Marketing for the New Market

You should look to ensure that your marketing strategy represents your chosen international market. If you don’t focus your business’ marketing efforts to the given international market, then you may not find any customers. Think about translating your website and social media channels into other languages so that international customers can easily access them.

 

  • Keep Your Focus

Limit the risks in business expansion by picking one product to test out overseas before expanding further. Aim to make your global business growth strategy gradual and considered. Stick with one product in one place, perfect it and then grow from there.

 

If you want to expand your business globally, don’t miss out. You can reap all the benefits of international expansion and, with the right research, manage and mitigate the risks associated with global business growth.