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Pros and Cons of UK Businesses Expand Overseas

Starting and running a business internationally has never been easier. The internet has made it possible to make the necessary connections, do market analysis, and capture your share of the international market easily. But is this a step you should be considering?
Here, we look at some pros and cons of expanding your business into international markets.


Pros of expanding your UK business overseas

Allows for international growth

UK businesses that trade overseas have a higher potential for growth that cannot be achieved in the domestic market. Expanding overseas gives your company the opportunity to create a bigger customer base, which properly managed should translate into increased profit and growth.

Encourage competitiveness

UK businesses that expand overseas will find themselves competing with local businesses, and others from different countries. This type of competition will help these businesses focus on quality, product development, and valuable customer experience. This will help them stay ahead of the game, abroad and locally.

Improved company finances

When you expand your business overseas, you open the doors for increased financial performance. Expanding into the overseas market helps you broaden your market share, enjoy product diversification, and all the financial benefits that come with doing business abroad.

Spreading business risks

Should the UK economy experience a sudden downturn, businesses that trade in overseas markets will experience minimal risks; this is because their international operations will help relieve the pressure caused by the economic problems of the home country. In fact, the more countries you do business in, the easier it is to handle such pressures.

As you can see, expanding your UK business overseas has a lot of advantages – the key is to budget for your expansion properly, so that you don’t hit hitches in the process.

Cons of expanding your UK business overseas

Cultural complications

Every country has its unique cultural differences, and not properly putting this factor into consideration can significantly affect your chances of international success. For example, in some cultures it is normal for new businesses to make a ‘monetary appreciation’ to government officials, a habit that would appear strange to UK business owners. Unless you are willing to meet this requirement, you may find it difficult to commence operations in your country of interest.

Logistics Complication

One unavoidable consequence of expanding overseas is the logistic considerations that can quickly get complicated. Shipping your goods from the UK can take some time, and when it arrives at your new market, moving your items to your facilities can develop into a nightmare, particularly when there is problem in communications caused by possible language barriers.

Foreign politics

Different countries have their own politics, and at different levels. In some cases, one government can put policies in place that will be changed by a succeeding government with no thought for the financial fortunes of visiting businesses.

Staying abreast with the political pulse of your host country is key to staying afloat, especially during times of government changes.

Business identity

Depending on the type of business you do, it may be necessary to rebrand your business so that the locals can easily understand what you do. While this may not seem like a lot, it can affect your brand identity, especially if you have to do this in only one country, while maintaining your original identity in other countries where you operate.

Final words

Despite these disadvantages, expanding your UK business overseas is a good business decision, as long as you have the resources and expertise to do this. Timing also play a very crucial role when entering a new market.

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