For many entrepreneurs, having the opportunity to tap into foreign markets is the ultimate dream. It is a signpost on the road to success, offering an entirely new and untapped audience to cultivate.
Yet trading with overseas entities will always have its complications, especially if Brexit becomes a reality. There are a thousand issues that you never have to consider when you’re targeting a domestic market, and in order to overcome them, you first need to recognise them.
To help you, here are just three of the things you need to think about before you put your expansion plans into action…
#1: Exchange Rates
Trading overseas means trading with business owners who work with a different currency, and depending on which way the market is leaning, this can take a significant bite out of your profits. To avoid this, you’ll find that you’re far better off using a reputable currency broker than a bank. The reasons for this are two-fold. Firstly, brokers usually work on much smaller margins than their traditional counterparts, meaning exchange rates are an average of 1-3 per cent more competitive. In addition to this, they will not charge you the transfer fees typical of banks, meaning that you could save between £10-£40 per transaction. These two factors could amount to significant savings over time, helping you to gain the edge over your rivals.
Assuming that your services involve transporting chattel in one form or another, you’ll also need to consider the practicalities and costs of transportation. Depending upon the frequency of your deliveries or receipts, as well as your funds, you need to decide whether it will be better to hire your own transport and teams, or whether a courier service and its attendant costs would better suit your needs. The easiest way to ascertain this is by sitting down and drawing up a list of the outlays associated with both, based on how frequently you’ll be sending or receiving goods from overseas. Although personal preference must play its part, the deciding vote should always come down to which of the two will help you to make the greatest profits.
Thirdly and finally, you’ll need to consider communication. Although many foreigners speak fantastic English and will be able to converse with you as easily as one of your domestic counterparts, you cannot simply assume that this will be the case. Some of the business associates you transact with may not speak a shared language, and in this instance, you need to consider engaging a translator. Freelance services will help to minimise costs, but it may also be worth hiring some people on the ground to transact with your overseas clientele on your behalf.
Cover these three bases, and you’re ready to take your company global.