Poised for global success?

Rob Israch at Tipalti outlines three important things to gauge whether your business is ready for successful global expansion

 

Over the past two years, rising interest rates and inflation in the UK have pushed many businesses to scale back their growth ambitions, with 78% of finance leaders saying they are prioritising sustainable growth over growth at all costs.

 

Yet, recent signs of economic recovery – including inflation falling below 2% for the first time since 2021 and the latest projections from the IMF suggesting that the UK is now expected to grow by 1.1% this year – are rekindling optimism for business growth.

 

As a result, global expansion is slowly making its way back onto the C-suite agenda, with more than half of Britain’s medium-sized companies planning to invest millions in international growth over the next five years. While growth won’t happen overnight, such investments are essential for building a resilient and scalable business structure. In fact, 47% of UK companies now see international trade as vital to their long-term success.

 

By prioritising global markets, these businesses are not only positioning themselves to capture new customer segments but are also enhancing their competitiveness, diversifying revenue streams, and spreading risk. However, timing is crucial when expanding across borders.

 

Success in global markets requires a nuanced approach to local market preferences and regulatory landscapes, and also a finance operation that is scalable for global growth.

 

Differentiation to fit local nuances

Many businesses looking to expand often rely on the strategies that propelled their growth in their home market. But to successfully enter other regions, businesses must master the art of differentiation and tailor their strategies to address country-specific needs. For example, what works in the UK might not necessarily align to customer needs in another country; it’s not a one size fits all approach.

 

At the heart of successful international expansion is a deep understanding of the new market’s unique environment. Companies should invest in rigorous market research to explore customer preferences, attitudes, competition and cultural nuances.

 

By identifying local mindsets, competitors and understanding consumer pain points, businesses can shape their packaging, messaging, and offerings to address their needs better and deliver relevant, compelling, and distinctive value.

 

In addition to market fit, understanding local legal and regulatory frameworks is crucial. From tax compliance to data privacy laws, each country’s requirements can impact a business’ operations. Adapting to these requirements proactively helps convey that you understand their market, avoid costly setbacks and allows your business to operate more smoothly, establishing trust with local customers.

 

Meanwhile, leveraging data can help businesses pinpoint the best markets for expansion and help them make informed decisions about where to focus efforts on which products. Let the demand your business has experienced by country inform your business’ international growth plans. It helps you understand which markets have the most pain points that your business solves well, and de-risks your investment bets.

 

Employees that understand the region

Successful international expansion hinges on more than just a solid business plan; it requires a team that intimately understands the market. Hiring employees with deep regional knowledge provides insights and helps navigate the complexities of local customs, regulations and customer expectations. These employees serve as cultural and operational bridges, ensuring that the business aligns with the region’s unique dynamics while maintaining the company’s core values.

 

The initial team you hire will also shape your local office culture, so select your talent thoughtfully. Done right, international divisions can infuse your entire business with fresh ideas and innovation.

 

In addition, thriving in other regions requires local relationships and to establish connections with alliances partners, suppliers or distributors, as well as regulatory bodies to acquire a local licence. Having people who can speak the language, understand the business customs and navigate local regulations not only builds credibility, but will also establish the business as a well-respected player within the community.

 

Bringing on local talent is not just beneficial for immediate growth, but is also a long-term investment in market resilience and stability. By cultivating a team that understands and embraces the local market, you ensure sustainable growth, build a positive culture and create a lasting foothold in the region.

 

Scalable payment processes

For businesses planning international growth, ensuring scalable payment processes is crucial. Global expansion adds complexities to supplier payments, like tax compliance, cross-border payments, currency exchange, and regional banking standards.

 

Furthermore, if your business has a multi-subsidiary structure across your regions, you need to plan for distinct spend approval workflows, regional fraud controls, and payment reconciliation and financial reporting challenges.

 

If your supplier payment process can’t nimbly respond to these factors, you’ll have to manually adjust your supplier payment process to each vendor’s situation. Simply put, your accounts payable workflow won’t thrive on a global scale.

 

To combat these challenges, technology – specifically automation – can be utilised to help streamline and automate global payments.

 

For example, it’s possible for accounts payable to have a one-size-fits-all onboarding process for domestic and international suppliers. An automated self-service portal lets suppliers input payment and currency preferences and tax details directly into a company’s accounts payable system, enabling AP automation to handle tax and payment process efficiently and compliantly. For companies with high volumes of international suppliers, this setup ensures AP can manage demand effectively and make timely payments.

 

The journey to global expansion

Timing is crucial when deciding to globally expand your business – it’s not something that can happen overnight effectively. Global expansion needs to be thoughtfully planned and delicately handled, making sure each element is in place to make your business investment a triumph.

 

Adapting your current UK strategy appropriately to the new market needs, while also making sure you have scalable global payment processes in place to scale your finance operation are key. Only when these factors are in place will a business see success on a global scale.

 

---

 

Rob Israch is President at Tipalti

 

Main image courtesy of iStockPhoto.com and imaginima