W&F Issue 4 2018

www.wealthandfinance-news.com 36 Wealth & Finance International - Issue 4 2018 Over the past decade, technological innovations have transformed the way businesses are able to operate overseas, opening a new generation of SMEs to exciting opportunities for international expansion. Evolving forms of digital communication now mean that small firms can easily access global markets while at the same time expanding their network of professional clients regardless of location. It is truly an exciting time for ambitious scaling businesses seeking to establish an international brand. For fast-growing businesses, the decision to expand beyond their native market is a significant milestone and one that could deliver new opportunities for growth. This is particularly true for UK SMEs who, faced with Brexit, are re- evaluating their business strategies and looking to international markets beyond Europe, such as Asia and the Americas. That being said, the decision to expand should not be taken lightly – it is crucial for business leaders to understand the long-term implications of an overseas business expansion, and how it fits into the overall mission statement of the company. After all, many businesses have tried to make the leap into a foreign market and have either been unsuccessful or encountered significant barriers in the process. Notably, online giant eBay had to shut down its operations in China in 2006, after two years of trying to break into the market. Having recently launched a subsidiary company in Singapore to complement Market Financial Solutions’ established operations in London, below is some useful advice for those who are looking to expand their business overseas. Why expand overseas? At the very crux of any business strategy is the ability to answer why something is being pursued, and how it will contribute to an overarching objective. While this may seem obvious, the complex and multifaceted nature of a foreign expansion can often cause people to overlook this important question. From the outset, it is important for any business to establish exactly what it hopes to achieve from a move abroad. For example, how will access to a foreign market help the business grow? Will an overseas expansion improve or hamper domestic operations? Does the company want to build a global brand, or is this a one-off expansion into a specific region? Picking the right market Once a clear objective has been set, it is then necessary to identify the right market to expand into. This can be a difficult task, particularly given the number of attractive options available in both established and emerging economies. This is particularly true of Southeast Asia – a region hosting some of the world’s fastest growing economies. To help inform this decision, extensive research is required in order to decide which market will deliver the desired growth objectives. Part of this process includes an in-depth analysis of existing government regulations, an understanding of the potential customer base and research into the socio-political and economic trends underpinning the market. This is especially true for specialist sectors such as bridging loans, which offer borrowers fast access to capital leveraged against an existing asset. Paramount to the success of any bridging company looking to expand internationally is the state of the target market’s real estate market and financial sector. Without an awareness of these two key factors, a bridging company will not be positioned to understand how relevant its services are in a foreign market. How businesses can overcome the challenges of expanding into international markets Paresh Raja, CEO of Market Financial Solutions Overcoming cultural differences Companies need to understand the cultural nuisances of the foreign market they are entering. This extends not only from the state regulations in place, such as tax legislation, but also an ability to grasp and respect the cultural practices regularly employed. Appreciating cultural differences will ensure businesses are able to create and cultivate new relationships, while also taking advantage of new opportunities as soon as they arise. From the onset, it is important for a business to consider hiring and training local staff from the market they are seeking to expand into. By embedding local people in the company, businesses can gain important knowledge of the local market and create a strong local presence. Determination to succeed Of all the factors to consider, central to the process of expanding internationally is the determination to succeed. Despite both the initial and long-term difficulties that will invariably be faced, there are significant benefits on offer for businesses looking to new markets. Innovations in communication and technology have enhanced a business’ ability to tap into markets that would have previously been too difficult to access. However, the approach to business expansion has not changed; a clear strategy is required that clearly explains how an expansion overseas will contribute to the overall growth of the business.