To be a growth-minded business, your organization will need to expand its horizons. Remaining competitive in today’s global marketplace requires overseas expansion.
By partnering with the right international freight forwarder and also entering the global marketplace, your organization can realize some specific advantages.
The advantages of growing global include:
- New revenue potential
- Exposure to foreign investment opportunities
- A more diversified marketplace
- Extended product market presence
- Greater access to international talent
- Access to new technologies and know-how
- Improved company potential for expansion and growth
The latter, of course, is the primary reason for many small businesses to think of going beyond their shores.
But unearthing the right opportunities comes with as many challenges as it does benefits. A lot of work will be required of you to successfully compete with local businesses and also ensure your business can sustain itself on a global scale.
If your business is ready to take the next step, read on to become more familiar with the most common hurdles you’ll have to overcome when expanding internationally.
1. Language and cultural barriers
While expanding to new markets will expose expansion your business to new perspectives that can help your organization become more inclusive and also diverse, potential language and cultural challenges can also arise.
These barriers can make it challenging to integrate your organization to a new environment fully.
If you can’t overcome the language barrier or connect with your international customers on a cultural basis, how can you expect to expand and also grow your organization? Luckily, there are several ways to address this significant hurdle.
The first is to narrow down your market. Consider expanding to a country that is similar to your own.
For example, if you are an Australian-based company, then a language and cultural parallel could be the United Kingdom or New Zealand. This makes the integration process more straightforward and less daunting.
Another way to overcome these barriers is to find a local partnership. Having a local partner on board will allow you to gain access to their local knowledge. They can assist in translating your brand’s message to be language- and also culture-specific so you don’t run into any misunderstandings that can negatively impact your brand’s image.
2. International shipping rules and regulations
Every country has specific international shipping regulations that must be followed to ensure your freight can leave the departure port. As you do your research on the best markets to expand to, you’ll find that every country has rules about what goods can be exported to the country.
To avoid any potential disputes with your cargo, you must stay up to date with all compliance issues. This can include anything from taxes and also tariffs to trading standards and regulations.
The most effective way to remain compliant despite the ever-changing landscape of international regulations is by creating a framework that ensures all the required documents your freight cargo needs are clearly and also accurately filled out.
These shipping documents can vary, but typically include:
- Proforma invoice
- Commercial invoice
- Packing list
- Certificates of origin
- Shipper’s letter of instructions
- Bills of lading
- Dangerous goods forms
- Documentary collection
Maintaining rigorous records will prevent any compliant issues and allow your goods to travel with ease. This protects not only your organization’s profits and time, but also its reputation.
3. Risks to supply chain management
Effectively managing any supply chain, even on a domestic level, comes with risks.
The challenge with going overseas growth is that many of these risks are amplified to another level. Variables like multiple supplier networks and different modes of transportation can make international supply chain management incredibly complex.
To address these risks and ensure the survivability of your company abroad, visibility and information management must remain a top priority. Your organization can do this by mapping out the complete supply chain process in its entirety.
The mapping process removes any potential friction along the supply chain, ensuring inefficiencies are addressed before they cause any issues. By continually monitoring your supply chain at each point, your processes can run as smoothly and as economically as possible.
Investing in supply chain technology enables your organization to improve visibility across all points of the supply chain. Achieving high visibility results in more informed decision-making, thus helping you avoid any surprises.
4. Threats to your cargo
Goods that must travel farther distances are more vulnerable to external threats. Once your products are in transit, all sorts of problems can arise. The most common risks to your cargo include thefts, hijacking or piracy, and environmental damage.
Organizations entering a new market must be prepared for risks and also have processes growth in place to mitigate said risks. Without careful risk assessment and analysis, loss, both financial and also reputational, can occur.
One way your organization can respond to such threats is by taking advantage of technological tools. Specific solutions like tamper-resistant seals and barcoding or RFID tags increase security for your cargo and also minimize the potential of loss due to theft or piracy.
Another great way to reduce risks when expanding growth internationally is to outsource certain logistic functions to specialists. Their expertise in international shipping will assist your organization in reducing or mitigating many risks your cargo may face.
5. Finding the right freight forwarding partner
Speaking of outsourcing functions, engaging a freight forwarder will enable your organization to work with a company that’s well-versed in international compliance requirements and risk reduction methodologies.
To ensure you partner with an experienced and also reputable freight forwarder, perform your due diligence. Like supply chain management, this will require a careful assessment of potential freight forwarders.
Your organization can carry out specific procedures to confirm the qualifications of a prospective freight forwarder:
- Assess how long the freight forwarder has been in business
- Consult with previous and existing clients for their experiences
- Check the freight forwarder’s track record and accident record
- Determine what services they provided
- Confirm which carriers they use and what track record their carriers have
- Confirm insurance policies
- Look to confirm their accreditations and licenses
As there’s no shortage of freight forwarders you can turn to, knowing who you can trust with your cargo will go a long way in guaranteeing that your goods arrive safely and efficiently.
Once you’ve created a shortlist of qualified partners, test out their freight booking platform. This will allow you to get a quick quote and also confirm that their network travels to your destination country.
Ready to tackle the global market?
Globalization represents new business growth opportunities not previously available. But international expansion is not without its challenges. To minimize the problems with selling internationally, it’s essential to know the risks in advance.
Preparation is a critical factor in success. By knowing the challenges that lie ahead, your organization will be better prepared to realize the rewards that global expansion brings.