So, business is booming. You’ve spent years building up your customer base in Australia, your sales are taking off and your brand has established itself as a serious competitor in your market space. It feels like your growth has stabilised. The next question that might enter your mind at this point is, therefore, “Well, what about expansion?” Specifically, taking your business and expanding it across the globe.
Why go abroad?
There are many reasons entrepreneurs choose to go global. The biggest and most obvious is, of course, access to a larger customer base. According to data from the World Bank, in 2023, Australia had the 14th largest consumer market in the world, with household consumption expenditure at a value of 855 billion USD. While this might seem huge (and it is), it’s still barely 5% of the United State’s household consumption expenditure, which lies at a whopping 17.5 trillion USD and is unsurprisingly the world’s largest consumer market. Expanding internationally to countries with huge consumer markets like the US, China, Japan and Germany can lead to huge rewards in terms of business growth.
Other reasons to go global include opportunities that come adjacent to a new market group. This means things like the opportunity to increase the things that your company does or produces, such as a diversification in products that might never take off in Australia but might be received well overseas. It can also mean opportunities to grow your team, hire new and exciting talent from all over the world and improve the benefits for your long-time workers and business partners who have invested in your business and been there from the start.
What risks should I consider?
Taking your business abroad is a high-risk, high-reward endeavour, and will cost you and your company enormous amounts of money, time and effort. It requires extensive research, preparation and paperwork, and going in blind is only for the extremely brave, or the extremely foolish.
Legal considerations
Every country has its own set of laws (and most countries have states that have their own separate set of laws, too). Doing business outside of Australia means navigating new legal obligations, from taxation to advertising to distribution and more. Make sure that you have a strong legal team behind you who are well-versed in the relevant laws and business practices of the country (or countries) that you are looking to enter. Keep them well-informed of your intentions, and of what sort of business you intend to perform, whether that be the same as your Australian operations, or different.
Cultural considerations
Beyond legal considerations, you also have to consider the cultural or lifestyle manners of your target consumers. This is especially fraught if you are looking to expand into places like Asia, where countries have very distinct and different cultures from Australia and its Western cultural influences. For example, Western and European luxury brands have spent enormous resources on targeting and appealing to high-end Chinese consumers, only to have their marketing efforts backfire when they unintentionally cause offence. Considering the culturally informed tastes, wants and lifestyles of your consumers is paramount to business success overseas.
Supply chain logistics considerations
It’s also important to work out the logistics of how you will conduct business overseas. Things like geography and weather hugely impact distribution and shipping, either limiting or increasing the access that your consumers have to your products. In this case, you’ll want to consult with experts, such as someone who has an online supply chain masters degree, to determine what options are available to you and which makes the most sense, both in terms of the cost and the timeframes.
If you’re importing or distributing perishable goods (such as food or flowers), fragile items, or extremely large or bulky items, you’ll have extra costs, compared to a business that makes small and easily shippable items like clothes. It’s also important to discover if you can create changes further up in your supply chain in order to realise further savings and take advantage of geography: for example, you might consider sourcing your products or raw materials from different countries that are closer to your target market.
At the end of the day, taking your business overseas can be an exciting and extremely rewarding experience, but also one fraught with risks and challenges. It’s important to consider all your avenues and prepare thoroughly before taking on this next step in your business’s journey.
