According to an Airwallex survey, as many as 70% of UK SMEs plan to scale internationally in 2023. For the local entrepreneur or business owner with vision and ambition, expanding to reach a much wider audience is an obvious step to greater success.

Why set up an international business?

To the uninitiated, setting up an international business may seem like more effort than it’s worth. However, there are many good reasons to take your enterprise beyond the borders of the UK: 

• Expand your customer base: You can reach a new pool of potential customers and increase your sales by expanding into the international market. 
• Build your brand: Expanding your business internationally can assist with building your brand and establishing a global reputation. 
• Tap into new talent and resources: You can access new talent and resources to help your business grow by setting up an international business. 
• Diversify your revenue streams: You can protect your business from economic downturns and various region-specific challenges by doing business in multiple countries and decreasing single-market reliance. 
• Increase profitability: You can drive growth and increase your business’ profitability by tapping into new customer bases and markets, resulting in your business becoming a multinational enterprise. 
• Maintain your competitive edge: Although competition in the global market is intense, your business’ international expansion can help you maintain or expand your competitive edge. 

The challenges of setting up an international business 

Setting up an international business is not without its challenges. It’s important to be aware of the potential difficulties so that you can plan and prepare accordingly. The most common challenges include: 

• Legal, logistical, and regulatory issues: From legal and regulatory issues to logistical issues such as product shipping, customs, and supply chain management, you will need to navigate a variety of challenges when expanding your enterprise. 
• Financial issues: High costs can be one of the biggest challenges when starting an international business, and you might need to invest a great deal of resources and time to ensure the success of your enterprise. 
• Cultural and linguistic issues: You will need to understand and respect differences in business practices, culture, and customs, as well as local languages, when entering international markets. 
• Requirements on your time: Initially, expanding into the global market can be labour intensive and time consuming. 

There’s no way to bypass these challenges, but by following the tried and trusted basics of how to set up an international business, you can position yourself to meet them head-on and to overcome them. 

How to set up an international business

1) Do market research 

The first step of setting up an international business is to identify potential markets by conducting market research. Gather and analyse data on product or service demand in various countries’ local markets and on their cultural, economic, and political environments. 

Thorough market research will give you insights into and an understanding of each potential market’s challenges and opportunities, allowing you to make informed decisions regarding your expansion. Use government websites, industry reports, trade publications, and market research firms for gathering information. You may also find it helpful to speak to other businesses that have made successful international expansions. 

2) Draw up a business plan 

Draw up a solid business plan after conducting market research. Identify and set specific objectives and goals for expanding internationally, and create an outline of the strategies and tactics you plan on using to realise those goals. Include a competitive analysis, market analysis, marketing strategy, financial plan, sales plan, and operations and logistics management plan in your business plan. 

Your business plan will act as a roadmap for your business’ international expansion, and it can help you to stay focused. The plan also could be a good tool for convincing potential investors of your business’ viability and for securing funding. 

3) Identify distributors and partners 

The third step of how to start an international business is to identify potential distributors and partners by finding individuals and companies who can assist with entering and thriving in your target market.  

If you have  a service-based business, look for local partners who can offer expertise as well as connections that can help you expand. If you have  a product-based business, look for distributors who can assist with selling your products in the country you’re expanding to. Ensure you evaluate your potential partners’ and distributors’ experience, reputation, and track record. 

4) Develop a strategy for marketing and sales 

Identify the most effective ways of reaching and engaging your target customers within the new market and develop an extensive marketing and sales strategy. One element of your strategy should be providing your website in multiple languages, which will make it more accessible to customers in various regions. 

5) Secure financing 

Various financing options are available to entrepreneurs when setting up an international business, such as grants, loans, and investments by angel investors and venture capital firms. Consider the terms, repayment schedules, and interest rates when evaluating your options. 

Foreign exchange is crucial for international businesses as it enables seamless cross-border transactions, mitigates currency risks, and ensures efficient capital allocation in a globalized economy. Sign up with Moneycorp for secure international payments and protect your business from currency volatility with our risk management tools.

Use your comprehensive business plan with outlined financial projections, goals, and strategies to give your potential investors a thorough understanding of your business and how you will use the funds to grow. 

6) Create a local presence 

Create a local presence in your chosen market(s) by registering your business with the relevant government authorities, setting up a physical retail outlet or office, and hiring local staff. If your business is exclusively online, ensure your website and marketing materials are adapted to the local language and culture. 

Sign up for a business account with Moneycorp 

Whether you need to set up a physical store or pay local distributors, suppliers, government departments, or staff, setting up an international business means making international payments. Sign up for a business account with Moneycorp and make secure international payments at your convenience.  

Be aware of currency risk