Going international is a huge achievement that comes with hefty benefits for any business. For starters, finding reliable sources for products overseas helps businesses cut costs that come with manufacturing locally. Secondly, finding an international market for products is a big step in achieving business growth.
However, in addition to dealing with different cultures and foreign laws, scaling a business to an international level comes with its own costs. If businesses are to grow to this level, then it is necessary that they do it at a reduced cost. Here are five ways that international companies can save on these costs.
1. Leverage technology
Business travel is essential for any business that wants to grow internationally. However, if you look at it from the cost perspective, it is really expensive. Adding together airfare, accommodation, meals, car hire and other expenses, these costs can overwhelm a business especially if it is just starting.
Thanks to technology, businesses can greatly reduce these costs. Instead of traveling overseas for a business meeting, request the client to meet you virtually. Tools like Skype for Business, Slack and Google Hangouts are great tools to conduct virtue meetings. The advantage of modern communication tools is that you get to share files and documents, as well as do a presentation online for your clients.
2. Hire locals in foreign countries
When businesses start exporting products, most tend to export the workforce to the foreign countries. While this could save on staff training since they are already familiar with the products, it can prove expensive in the long run.
Finding locals who can do the job is always a cost-saving strategy especially if wages in that country is lower than your home country. An even better option is hiring these talents through a local employment solution provider. For instance, if you need staff for your business in China, consider hiring through China Employer of Record. Whether you are looking for part-timers for a one-time project, or full-time employees, China Employer of Record will help you with hiring and managing the staff. With HR works off your shoulders, you can focus on growing your business.
3. Partner with like-minded people
If you are looking at importing goods from a certain region, it would be wise to partner with other like-minded businesses in the industry. This comes with various cost-saving benefits for you. You and your business partner will be able to buy in bulk and enjoy quantity discounts and better prices. You also share transport costs as well as the risks involved.
If, however, you are to involve a partner, it is necessary that you have a clear agreement as to how responsibilities and costs are to be shared.
4. Conduct thorough research before committing to any expenditure
Sometimes businesses dive into international business without doing their due diligence on overseas companies that they want to engage with. Even if a deal sounds to be good, it is important to ask yourselves a few questions. You need to know if that is the best deal that there is, or other suppliers have better prices.
Compare the regions as well; you could order goods from a certain region, only to realize that the market prefers items from another region. Ensure you have done good research before committing your money to a particular manufacturer or region.
5. Allow flexible working
The costs of establishing an entity in a foreign country is huge for any business. In addition to this, setting up an office and equipping it also takes a hefty sum out of the business. Monthly overheads such as rent, internet and office supplies are costs that can be avoided if businesses did away with offices in a foreign country.
This can be achieved by allowing employees to work from home. Thankfully, technology has made this kind of working possible for businesses. You just need to equip your staff with the necessary tools and knowledge for effective working and collaboration. A plus, flexible working helps workers achieve a good work-life balance. In addition to saving monthly overheads, you have happy employees who will be optimally productive.
When it comes to running a business, it is always good to analyze the costs involved. Find the ones that are avoidable and look for ways to eliminate them from the business. This is a necessary strategy if business owners want to scale their business internationally while minimizing costs.
Peter Palladino is a business advisor for several companies in the New York region. He is interested in augmentative communication, capacity building and enhancing the quality of interaction with customers.