Starting and maintaining a business that goes beyond your home country’s borders can open your world of opportunities up. There is the potential to enjoy greater profits, a larger base of customers, and an increasingly expanded influence around the planet. With all of this potential opportunity, there is also the possibility of additional problems with a business that operates on a global scale. Here are 10 challenges business owners and teams must face when operating a global company.
- Unfamiliar laws and policies. One of the biggest hurdles business leaders have with a global enterprise is the law. If you operate a company in different countries, you have to be aware of each locale’s laws regarding business and all federal policies. You won’t be able to use the excuse of ignorance if something goes wrong and you, a member of your team, or your business violates a regulation. Make it easier for yourself if you simply learn as much as possible about this topic before going global.
- Currency exchange challenges. Operating a global company also means you’ll have to deal with different currencies. Additionally, you may collect payments in one local currency in another country, but then you’ll need to convert your profits back to your home currency afterward. Uneven currency exchange rates can make this process cost you money and cut into your profitability. Look into ways to lessen the blow by making deals with currency investors.
- Financial accounting issues. International accounting procedures can also be a big headache if you don’t know the ramifications of tax law and financial accounting codes. Hire a competent accounting team that has experience dealing with collection and ordering in different parts of the world. Make a sound strategy that gives your company an edge with the local tax code and puts you in compliance with your home country’s policies as well.
- Political unrest. Another potential problem your business may face in the global market is political unrest. You may want to become an international affairs expert before you consider pushing your business to go global. In 2019 and beyond, the world stage continues to have sensitive hot spots around the world that could potentially explode into volatility. It may be wise to steer clear of some of these areas for the time being.
- Translation miscommunications. Working on the international stage may also present problems with translations. Sure, there are many easy ways to get a quick translation of an email or a marketing message through online translation tools, but it’s best to work with a native speaker to help you translate your message.
- Cultural misunderstandings. Next, watch out for potential cultural misunderstandings. Different parts of the world may not understand the point of your product or service, so focus on what the population values and needs before launching a new product initiative. Explore what benefits you could offer to the people of the country and be sensitive to religion and cultural norms.
- Global shipping SNAFUs. If you ship parts, materials, resources, and your final product internationally, you can run into additional problems. With global shipping, you’ll have to deal with import and export tariffs and other tax issues related to bringing items into another country. You’ll have to find an economical solution that helps reduce your bottom line.
- Business structure missteps. Successful international business leaders, such as Sjamsul Nursalim of Indonesia, also take advantage of business structure concepts to increase profitability. Nursalim is part of numerous international corporations and helps provide expert advice regarding business structure and corporate procedures for the Asian region. When you put your team together, consider recruiting experienced executives who can help you navigate these international issues much easier.
- Pricing and marketing mistakes. A successful international business must also consider different pricing strategies and marketing plans to find a niche in a different country’s market. The local economy may have some idiosyncrasies that your team will need to discover. Additionally, you’ll need to calculate the cost of resources in your new geographic regions and see how your profit margin will be impacted. Don’t forget to consider different ways you’ll need to market your products or services to a varied audience around the world.
- Payment and profit issues. Finally, there are also issues you may encounter related to payment methods. International banking policies or payment processors may impact your ability to turn a true profit once you go global. The key is to work with a local expert or study the area’s financial and banking arenas to learn about how you can get ahead in the market. Partner with international payment processors to get more of your hard-earned cash to come back to you in the form of large profits.
It can be tough to manage a worldwide global enterprise, but if you know what potential pitfalls are out there, you can prepare and be ready for anything. Focus on navigating some of these issues so your international business can be a success story.
Note: this post contains contributed content.