Rob Israch, President at Tipalti
Despite the wealth of economic challenges UK businesses continue to face, expanding globally is still on the agenda for business leaders. Statistics show that almost a third of UK businesses are hopeful for international expansion in the next three years, with nearly half of businesses seeing it as a vital part of their long-term business plan.
Targeting international markets not only allows businesses to find new customers, but also helps strengthen their market position. However, changing the direction of travel requires careful planning, and timing is key. To succeed in new target markets, businesses must demonstrate agility when adapting to local market preferences and varying regulatory requirements, while ensuring their financial operations are structured to support scalable global growth.
The need for agility to fit local markets requirements
Many businesses looking to expand often rely on the strategies that propelled their growth in their home market. But to succeed in new markets, businesses must master the art of differentiation and tailor their strategies to address country-specific needs. For example, what works in the UK might not necessarily align to customer needs in another country; it’s not a one-size-fits-all approach.
At the heart of successful international expansion is a deep understanding of the new market’s unique environment. Companies should invest in rigorous market research to explore customer preferences, attitudes, competition and cultural nuances. By identifying local mindsets, competitors and understanding consumer pain points, businesses can shape their packaging, messaging, and offerings to address their needs better and deliver relevant, compelling, and distinctive value.
In addition to market fit, understanding local legal and regulatory frameworks is crucial. From tax compliance to data privacy laws, each country’s requirements can impact a business’ operations. Adapting to these requirements proactively helps convey that you understand their market, avoid costly setbacks and allows your businesses to operate more smoothly, establishing trust with local customers.
Meanwhile, leveragingdata can help businesses pinpoint the best markets for expansion and help them make informed decisions about where to focus efforts by allowing the demand your business has experienced in each country to guide and shape your international growth strategy. It helps you understand which markets have the most pain that your business solves well, and de-risks your investment bets.
Recruit talent with a deep understanding of the local region
Successful international expansion hinges on more than just a solid business plan; it requires a team that intimately understands the market. Hiring employees with deep regional knowledge provides insights and helps navigate the complexities of local customs, regulations and customer expectations. These employees serve as cultural and operational bridges, ensuring that the business aligns with the region’s unique dynamics while maintaining the company’s core values. The initial team you hire will also shape your local office culture, so select your talent thoughtfully. Done right, international divisions can infuse your entire business with fresh ideas and innovation.
In addition, thriving in other regions requires local relationships and to establish connections with alliance partners, suppliers or distributors, as well as regulatory bodies to acquire a local licence. Having people who can speak the language, understand the business customs and navigate local regulations not only builds credibility, but will also establish the business as a well-respected player within the community.
Hiring local talent is not just beneficial for immediate growth but is also a long-term investment in market resilience and stability. By cultivating a team that understands and embraces the local market, you ensure sustainable growth, build a positive culture and create a lasting foothold in the region.
Implement scalable payment processes
For businesses planning international growth, ensuring scalable payment processes is crucial. Global expansion adds complexities to supplier payments, like tax compliance, cross-border payments, currency exchange, and regional banking standards. Furthermore, if your business has a multi-subsidiary structure across your regions, you need to plan for distinct spend approval workflows, regional fraud controls, and payment reconciliation and financial reporting challenges.
If your supplier payment process can’t nimbly respond to these factors, you’ll have to manually adjust your supplier payment process to each vendor’s situation. Simply put, your accounts payable workflow won’t thrive on a global scale.
To combat these challenges, technology – specifically automation – can be utilised to help streamline and automate global payments.
For example, it’s possible for accounts payable to have a one-size-fits-all onboarding process for domestic and international suppliers. An automated self-service portal lets suppliers input payment and currency preferences and tax details directly into a company’s accounts payable system, enabling AP automation to handle tax and payment processes efficiently and compliantly. For companies with high volumes of international suppliers, this setup ensures AP can manage demand effectively and make timely payments.
The roadmap to international growth
Global expansion is a long process and timing is critical. Success requires meticulous planning, with every aspect of the strategy carefully considered along the way – from scalable payment processes to adapting to local markets and hiring the right employees. Businesses must be able to adapt their current strategy to meet local needs and establish robust global payment systems to support financial operations abroad. Once these foundations are solidly in place, businesses will be well-positioned to turn its international growth ambitions into a reality.
