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If your business is doing the same things it was doing a year ago, it could mean that operations have become somewhat stagnant. Over time, such a business will also start losing out to innovative competitors and disruptive start-ups in your industry.
Given that technology has essentially created a borderless world, companies that seek out new markets for growth and diversify their revenue sources will not only stay competitive but also be rewarded with a more diversified and stable business.
While going international can be beneficial to your company’s reputation and standing, it can also be a complex process. You would need to have a deep understanding of your target market, the competition, local trends, and legal requirements to successfully launch your business.
Here are some tips that you can consider as you seek to scale up your business, especially into new markets.
#1 Understand Your Target Market (And Create A Business Plan)
Before starting any new operations in an overseas market, you should understand the risks and rewards. Part of this involves learning about your target customers, as well as the successes and shortfalls of similar companies and/or products or services in the market.
One practical way to do this is with the SWOT analysis framework, which is to identify your Strengths, Weaknesses, Opportunities and Threats.
You could also look at the demand for your brand and/or product in the target market by doing a market analysis or a product gap analysis against local products. Besides desktop research, and assuming you do not do on-the-ground focus groups, one simple thing you can do is speak to your existing customers and/or suppliers who are operating in your target markets.
This should help you formulate a localised marketing strategy to capture market share in the new country. At the same time, a good understanding of the local culture will also help shape your company’s local brand identity so that it does not feel like an outsider.
Read Also: 4 Ways Providing Longer Credit Terms To Customers Can Improve Business
#2 Tap The Available Grants Meant To Help Businesses With Their Expansion
Businesses in Singapore can take advantage of the many government initiatives meant to help businesses grow and expand. This includes local SMEs that need funding support for their overseas expansion plans.
One such scheme is the Grow Digital programme of the Infocomm Media Development Authority (IMDA) and Enterprise Singapore (ESG). It provides up to 70% funding support to SMEs that participate in the e-commerce platforms under Grow Digital to sell overseas.
To learn more about the other grants that are available for SMEs, you can check out the e-Advisor on the GoBusiness Singapore website.
#3 Gain Access To Various Financing Options To Fund Your Expansion
Although the ultimate aim of any business expansion is to increase your bottom line, it can also be an expensive endeavour, especially at the start. Even if your business is in good financial health, it can be wise to fund your expansion via financing rather than dip into your operating cash flow.
You can again lean on government-supported financing schemes through Enterprise Singapore (ESG), like the Venture Debt Programme, which is made available to support the growth of later-stage companies for up to S$8 million per borrower. This is especially suitable for high-growth start-ups that do not have significant assets to use as collateral.
Another financing option that SMEs can consider is an overseas expansion loan. Borrowing from your Singapore bank may be more favourable, as you have a business track record here compared to being a completely new entity in the overseas market. Besides an easier (and more familiar) loan application process, you may also get more attractive interest rates.
Additionally, you should also be aware of other financing options to unlock more funds, especially when you might have a tighter cash flow during the initial phase of your business expansion. This is where Invoice Financing, which allows you to gain upfront cash from your unpaid customer invoices, can be beneficial. There are also other trade finance products that you can use to pay and get paid from your international suppliers and clients.
#4 Choose A Suitable Payment Method With Low Foreign Exchange Fees
Foreign exchange fees and costs can add up quickly when you collect more and make regular payments in foreign currencies. Choosing an efficient payment method can lead to substantial cost savings, especially as these transactions happen more often.
You could also make payments to your suppliers in foreign currencies through a number of methods, such as telegraphic transfer and international automated clearing house (IACH) out the rates here for the different methods.
Having the right business bank account can give you access to overseas payment solutions that suit your business needs. For example, as an OCBC business account holder, you can make international money transfers through OCBC Velocity and the OCBC Business app. It also offers FX Contract Booking, which allows you to lock in your preferred FX rate now and pay 2 days later, protecting yourself from currency swings.
In addition, OCBC can help you monitor FX rates. You can set an FX rate that works best for you and get notified when the desired rate is reached.
#5 Automate Your Financial Operations (Where You Can)
Running your operations from multiple locations can be difficult physically, let alone cross-checking your financial data. You may have to keep track of and match up several transactions in different foreign currencies.
Using accounting software such as Xero and Quickbooks could help you consolidate your finances and better manage your cashflow. If you are an OCBC business account holder, you would have free access to OCBC Velocity, where you can easily manage all your accounts and cash transactions from a single platform. You would also be able to apply for trade financing, initiate payment and collection, and forecast your cashflow.
#6 Comply With Local Taxation Rules And Legal Regulations
Before you start your business in a new market, you should also research the local taxation rules. Each country would have different taxation rules regarding the corporate tax rate and the goods and services tax (GST) payable.
For example, some countries like the United States may not have a national sales tax; therefore, different rates would apply at the state level, which is different from Singapore, which has only a single (national) tax rate, and Hong Kong, which does not have any sales tax.
It’s critical that you are aware of and understand the local tax schemes and know the important dates and international agreements to avoid any legal implications later. Alternatively, you could also hire a tax CPA or lawyer to advise you on the appropriate matters.
Partner With A Trusted And Reputed Bank For Your Business Needs
Lastly, if you’ve decided to move forward with your plans to expand internationally, you should strongly consider teaming up with a trustworthy and reliable banking partner in Singapore. OCBC has an established presence in ASEAN and Greater China.
Read Also: Guide To Opening A Business Account For Your Start-Up In Singapore
The post Scale Up: Proven Tips For Growing Your Business Internationally appeared first on DollarsAndSense.sg.
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