Are you a British business owner who is thinking about expanding your business overseas? If so, you’re in good company. More and more British businesses are setting up shop in other countries, and for good reason. The global economy is growing, and there are many opportunities for businesses to succeed in new markets.
Swoop has just launched in the USA, which is big news for us, but the whole company was founded in two territories (UK and Ireland) to take advantage of grant funding and tax breaks that helped us grow the business fast early on.
Post-Brexit, it may make sense for you to have a foothold in the EU. You might want to set your sights further, and with remote working there’s no reason why you can’t have offices all over the world (as long as the right people are working at the right time and available to the right teams).
Before you plough ahead with opening your office in the Seychelles, however, there are a couple of things that I need to pass on from our experience at Swoop.
Research the incentives
The first step to setting up a business overseas is to do your research. This includes researching the target market, the legal requirements, and the cultural differences. One thing you must not miss out: how welcoming your new home will be.
Research the legal requirements for incentives
Each country has its own set of legal requirements for businesses. These requirements can vary from country to country, so it’s important to understand what you need to do to comply with the law.
Beyond that, you must ensure that if you have opened to take advantage of a tax break or grant, you stick to the rules otherwise your whole reason for opening up abroad has gone out of the window.
Are you offering something they need?
Is your product or service something that people in your new home have a need for? If you have been a big fish in a small pond, you may find that your model is no match for fiercer competition in a new land. You need to carry out the right kind of market research, talking to potential customers, and analysing market data. Ask the difficult questions, better to know early than too late.
Test your assumptions, especially around cultural differences: we heard of a jeweller who opened a shop in a new territory in October. Looking at the January figures with dismay, he asked: “Don’t you buy each other jewellery for Christmas in this country?” And got the answer: “No, we don’t.”
Choose the right business structure – and explore the possibilities
There are a number of different business structures that you can choose from when setting up a business overseas. The right structure for you will depend on a number of factors, such as the size of your business, the type of business you’re in, and the tax implications in the target market.
At Swoop, we knew we needed an office in the UK and one in Ireland to qualify for the assistance we used to get started. Although these offices can be a toehold in a territory, we found that we were able to get involved in an internship program in Denmark though our Dublin offices, allowing us to access some really exciting talent that would not have been available to us if we were exclusively based in the UK.
Get boots on the ground
If you’re not familiar with the target market, it can be helpful to find a local partner. A local partner can help you navigate the legal and cultural landscape, and they can also provide you with valuable insights into the market.
Several key members of Swoop staff have lived overseas before, so it became possible early on to launch in Canada. If you’re looking at partners or new hires, think about their family background: there may be connections you can make in the countries you wish to open in.
At the very least, you should attend relevant trade shows and conferences. This is a great way to meet potential customers and partners, and to learn more about the market.
Finally, be a good guest: getting involved in the local community will help you build relationships and get to know the market better. We know a company that always looks to sponsor a local amateur sports team as it’s something that brings people together and gets your name associated with good things from the get go.
Lean on advisors and your network
It’s important to get the right advice when setting up a business overseas. This includes advice from a lawyer, an accountant, and a business consultant. These professionals can help you ensure that you’re complying with the law, and they can also help you make the best decisions for your business. Make sure that the people you’re working with have experience in the specific country you wish to open in.
Beyond professional advice, reach out to your network: you can almost always find someone with relevant experience of the country you want to be in: getting some informal wisdom from them (“Everyone says you have to do this – but when you get there you actually find you need to do that”), especially if they have set up shop in the target market themselves can offer you valuable insights and advice.
There are plenty of reasons for opening up overseas, beyond having a few exciting cities on your business card. Is it a challenge you’re ready to take on?
