When you’re going for growth, international expansion should always be a critical part of your strategy. Selling overseas can bring new opportunities to increase revenues and can even extend the life cycle of your product or service. For mid-sized organisations, expanding reach across borders is a natural progression when in-country growth is starting to slow or plateau – yet a recent Going Global survey from Tipalti, the payment automation company, shows that just 11% of organisations feel qualified to successfully address all aspects and challenges of global expansion.
What’s holding businesses back?
We can’t ignore that, in the current geopolitical climate, companies are facing higher uncertainty than usual. Indeed, the survey revealed that 69% of business decision-makers are concerned about trade disputes between the U.S. and China, and 71% are concerned about renegotiation of international trade agreements such as the North American Free Trade Agreement (NAFTA). In addition, many are concerned about the impact Brexit could have on their European expansion.
Beyond global uncertainties, companies are grappling with significant concerns around their supply chain. It can be a minefield trying to maintain quality from global vendors, avoid tax and regulatory compliance penalties, and pay vendors in different countries and currencies.
Other aspects of global expansion organisations feel underqualified to successfully address include: knowledge of local markets, different tax codes, foreign exchange volatility, hiring to support international expansion and compliance and regulatory risk. Roughly a third felt underqualified for each of those respectively.
So, how can companies overcome these challenges to successfully scale?
The survey found that many forward-thinking organisations are making changes to enable international expansion. In fact, 57% are adopting new technologies, while 51% are engaging with vendors in new markets.
Further, there’s a need for finance departments to evolve their role. By shifting their focus from managing the details of financial operations and supplier payment processing to delivering more strategic advice to the business, they can better support the organisation’s growth ambitions. For example, an increased focus on planning and analysis and risk management will help the organisation make more informed decisions about which markets to invest in.
To achieve this, finance teams need to streamline back-office operations. Automating processes will ensure more time is spent partnering with other areas of the business to deliver greater value, for example by speeding financial close, optimising working capital, forecasting, cash flow analysis and improving business productivity. It will also ensure there is a strong infrastructure in place to allow for scalable growth – without the need to continually hire.
Going global can feel daunting for mid-sized businesses – particularly when there are multiple macroeconomic and political factors beyond their control. However, many firms are overcoming these challenges by using globally-attuned back-office technology which enables them to execute their global growth with greater efficiency and reduced risk – not to mention freeing up valuable internal expertise to help the business make smart decisions around when and where to expand.