International expansion is an exciting business step – but what kind of leadership challenges should you expect?

Growing your business to the point that you’re considering an international expansion is something to be proud of – but it’s vital that you don’t overlook the challenges that such an expansion brings.

Taking steps into a new territory is a learning process, and the competencies needed for global managers and executives obviously differ from those in their home territories.

Regardless of the size and shape of your international expansion, don’t make the jump without first developing global leadership skills, and giving yourself and your business the best chance of success.

So let’s look at some of the most important tips for leading an international expansion:

1. Due Diligence

If you’re thinking about how to expand globally, you’ll need to be comfortable that the move makes sense. Practically, this means conducting due diligence on your expansion location and being confident your business can handle the challenges it presents.

Take fact-finding trips, commission expert analysis, and develop a first-hand sense of how you’re going to accomplish your goals.

2. Secure Funding

Every expansion, international or local, requires financial resources. You’ll need to secure funding, and raise capital for the move – which may mean developing a relationship with investors.

Many governments and local authorities offer incentives to attract international business.

Seek out, engage, and meet with local and national authorities to discover what kind of financial support or advice is available.

3. Find Partners

To make as smooth a debut as possible in a new territory, it’s a good idea to partner with local businesses. Local partners can help with a range of logistical needs or even promote your business to an existing client base.

Take the initiative and be imaginative in approaching regional businesses across sectors – some countries have institutions dedicated to helping foreign businesses make professional connections.

4. Attention to Detail

Leading an international expansion means paying attention to small details, especially during important administrative hurdles. Business registration with a national commercial authority, for example, is a crucial step.

Be prepared to do the necessary administrative legwork – your diligence and attention to detail will ultimately dictate when (or whether) your business can open its doors.

5. Build Your Team

You must be confident that your employee populations at home, and in your new location, can handle your expansion project.

Build your expat team carefully: your employees should not only have the capability to deliver the standards you expect, but should also be suited to the pressures of moving to, and working in, a foreign environment.

6. Coordinate and Communicate

As your global footprint expands, the logistical strain on your business operation increases, making the need to coordinate and communicate across territories more important than ever.

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Make sure your communication infrastructure suits the challenges of international growth.

Your messages and directions will need to be relayed with clarity and efficiency as you coordinate between teams in both your domestic and expansion locations.

7. Manage Internal Services

It’s easy to become distracted by the ‘bigger picture’ of an international expansion – remember to retain focus on the ‘mundane’ internal services that keep your business running, especially crucial processes like payroll and HR.

The administrative complexity of global payroll and HR can be daunting: to create a ‘global solution’, it might be worth considering outsourcing the processes to a third-party expert in order to remain compliant with an unfamiliar legislative landscape.

8. Explore the Culture

In an unfamiliar foreign business environment, an understanding of local culture and customs can help significantly.

Cultural acclimatization is a complex process; you may need to learn how to meet and greet customers and clients, how to handle transactions, or even how to speak a foreign language.

Do your research and lead by example. As an owner or director, your employees and customers will look to your example as your business establishes itself.

9. Hire Locally

It’s likely that you’re going to need to hire local employees in some capacity in your expansion location.

While you may be able to outsource HR needs, if you want to direct and shape your employee population, you’ll still need some understanding of the local workforce: its language, its culture, and the equivalency of academic and professional qualifications.

10. Patience and Creativity

No matter how many feasibility studies and market analyses you carry out, there is going to be an adjustment period as you find your feet in your expansion location.

During this time, your expansion will face plenty of unexpected challenges – many requiring a degree of creative problem solving.

This adjustment period requires patience, resilience, and the confidence that the work you have put in, and the team you have assembled, will navigate the procedural bumps and deliver the results that you expect.

How Can You Lead an International Expansion?

If you have ideas that you feel like sharing that might be helpful to readers, share them in the comments section below. Thanks!

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Graham McKechnie
Graham McKechnie has more than 25 years of global mobility experience, and heads up Activpayroll's global mobility division. He is a qualified tax professional and a member of the Association of Tax Technicians (ATT).
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