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Expansion beyond local borders represents a great opportunity for businesses as the global economy becomes more competitive and broadly connected. In this sense, a company that can reach international markets can attract a new group of customers and, for instance, maximize the chances of business development.
Companies seeking global expansion can also strengthen their brand reputation and diversify their assets —which reduces the dependence on their domestic market—. Even more, business owners can establish new strategic contacts and get local talent that could provide valuable skills and innovative ideas for the company growth.
Moreover, in recent years, emerging markets have created greater business advantages for international investors. According to the Global Investment Returns Yearbook, emerging markets and frontier markets represent 55 percent of the global Gross Domestic Product (GDP).
Certainly, there are many advantages of starting a business in global markets, but before taking this next step, you must identify which is the best location for your product or service. For this reason, here are five tips when choosing a strategic location for your business.
5 Tips for your Business Expansion Location
Identify your Business Needs
First of all, you must know which are the strengths and weaknesses of your company in order to identify the business readiness for going global. Also, it is essential to understand your company priorities and needs depending on your type of business. By doing this, you can determine your target audience, product or service to provide, required operation costs, suppliers or distributors needed, and other essential resources for your expansion.Research Different Locations and Evaluate the Local Market
Once you have identified your goals and business needs, you must gather relevant information about all the locations or countries you are interested in. Analyze their demographic characteristics, local competitors, available markets, consumer traffic, and commercial opportunities. This will help you to focus on the most attractive locations for your services and/or products.Analyze the Local Regulations and Easiness of Business Incorporation
When entering new markets, it is important to understand the regulations, policies, and rules that apply to your business —those that could represent a barrier for your sales—. This includes any tax, fees, laws, and duties that are expected to comply with. In this context, it is advisable to carefully analyze the political, governmental, and economic environment of the country to determine the impact, challenges, and risks of entering an uncertain region. A location may be ideal if it ensures a business-friendly environment based on:- Consistency and transparency of legal management systems
- Economic stability and global competitiveness
- Fast, simple, and flexible business incorporation processes
- Access to local financing
- Fixed exchange rate
