When someone starts a business, and it becomes highly successful, that person’s thoughts often turn to expansion. After all: entrepreneurs launch new businesses because they want them to grow, and they want to build their brands.
One thought that often enters the minds of entrepreneurs is whether they should expand their brands overseas. Markets in developing countries are often lucrative choices for businesses. But, is that something you should do?
Here’s what you need to consider:
Firstly, it makes sense to spend a lot of time researching the culture of the developing nation that interests you. One sad fact about business expansions in such countries is that many fail due to an evident lack of understanding.
Entrepreneurs might have all the right intentions, but if they fail to do relevant background research, they’ll end up wasting their time and money. Knowledge is power, as they say, and you should keep that in mind before expanding to other nations – especially developing ones.
One fact that catches out many business leaders is failing to research if a developing country has any sanctions imposed on it. What are sanctions, you might ask? In a nutshell, they are punishments one or more countries put on another nation.
Sanctions can be against individuals, groups of people, and even the environment. They can be for economic, diplomatic, or military reasons – or a mixture of reasons. As you might expect, sanctions can have a negative impact on a developing nation.
Always research if there are any sanctions in a developing country for the type of business you wish to operate there. For example, the United States has had sanctions against Syria since 1986 due to its poor human rights record and state-sponsored terrorism.
The Rules and Regulations
When you want to do business in a developing nation, you must keep in mind that such countries’ governments are typically volatile. What that means for you is the rules and regulations for business are susceptible to change.
For instance, you might find that the rules surrounding tax laws and permit requirements could change, sometimes with no notice. You could end up falling afoul of the rule changes and face hefty financial penalties or worse in such situations.
The Work Ethic
It’s no secret that people in some countries work harder or for longer hours than others. It could be to your advantage if the developing nation you wish to expand in has more hard-working people than where you are.
However, if the reverse is true, it’s a fact you may have to live with and compromise. Don’t assume that everyone around the world works at the same pace as you.
One final consideration to make is that the language barrier may prove an issue for your business. As you might know, things can sometimes get “lost in translation,” and confusion, misunderstanding, and even frustration could ensue.
Learning the language and becoming fluent in it can significantly benefit your business, especially when it comes to understanding how specific procedures or processes get met.