Tips for expanding a B2B business outside the US

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The following is a guest post from Jim Ogle, CFO at Anteriad. Opinions are the author’s own.

Expanding a business outside the U.S. can be a great way to increase a company’s revenue, footprint and dominance in the global market, but it’s not a sure bet. Even the simplest expansion plan — dipping a toe in the water by hiring a local salesperson — comes with many implications that take resources away from other priorities. An organization will need to support the business the salesperson brings in, position their products appropriately for an entirely different market and comply with regulations and business norms. Not to mention potentially communicating in another language.

For a business planning an even larger international presence, there are even more complications to consider, such as finding an office, researching the competitors in the region and finding a bank. There could also be a cultural disconnect. Even so, many companies expand anyway and see a positive return. As someone who has led financial teams through several international expansions, here are some lessons I’ve learned to make the experience as smooth as possible.

“Due” the homework first

The due diligence phase can sometimes feel like it’s slowing the company down, but it will save a lot of time in the coming months. Assuming the stakeholder is a department head, it’s critical to work with the C-Suite, especially the CEO, to get buy-in on the project. 

The first step is to map out feasibility, such as:

• Are there clear signs of demand for your product/services? What are the data points and are they significant enough?
• What is the competitive landscape? Do you have a large, growing set of companies in the space, has a competitor exited the market or do you have new hires that are in the market with a current client list?
• Define what success will look like in three years. These need to be financial goals on what you are willing to invest in year one to get your desired return in year three.

Once everyone agrees, the individual stakeholders should think through everything that comes with selling to buyers in another country. Going rogue and putting down roots in another country without the support of finance, legal, marketing, customer support, tech and HR will likely backfire and create resentment when people are asked to “help out.”

Ideally, an international expansion will be communicated as a priority to all relevant stakeholders, and the team should work together to map out what support they can provide to get the initiative off and running successfully. Consider a simple scenario of a new sales hire in Europe who plans to attend several conferences. The finance team will have to create and approve a budget, marketing will have to support with collateral (potentially in another language) and the customer support team will have to be there to manage any sales that do come in (potentially in another language). The legal and data team may also need to make sure their offering complies with EU regulations.

Make partnerships and investments that reduce complexity

There are easy and hard ways to set up shop. Hiring experts in-market; finding the friendliest environment in terms of regulations, competition and buyers; and creating a team that can be efficient and profitable provides a healthy runway. Diving into a complex, expensive market that’s too immature, already saturated or lacks sales talent creates unnecessary difficulty.

Unless there is a clear reason to enter a particular country, understanding the regulatory environment can help determine the best place to create a first footprint abroad. Every country is not the same. Administrative burdens can be quite heavy in certain countries like France, Spain and India, while much less so in places like Singapore, Australia and Ireland. Consider the use of advisory firms, as it is usually only the largest corporations that have the in-house skill set to navigate entity setup, taxation and payroll rules.

Setting up a banking relationship can be the most difficult step. A global firm that handles U.S. treasury can make it easier to open a local branch in a foreign country. If not, it will be much more difficult to find a bank to take on local country business. In our experience, Revolut is the most flexible in these situations.

Rather than hiring a team directly, consider starting by hiring independent contractors through a firm such as Globalization Partners, which will limit the risk of setting up an entire entity. There are rules companies must comply with, so consult a regional tax professional to create a good proof of concept. If it’s clear that the full-time employee route is advantageous, consider using a firm such as Vistra to assist with entity set up, payroll navigation, treasury functions and legal compliance.

However the team takes shape, it is vital to have a leader in that location, on-site, who can help navigate staffing. This person will be critical in knowing the market, competitive environment and local hiring markets. They’ll also be key to employee retention. Navigating local holidays, days of cultural significance and local employee/employer relationships all help to build a longer-lasting business. While work from home is still prevalent in the U.S., the office environment is embraced much more in places like Australia, Japan and Europe. Building a company culture and camaraderie among your local office is another key to success.

Committing to communication

Unless the expansion is in Canada, the cultural, language and time-zone differences are real hurdles that employees will need to overcome to work well together as an international team. Getting leaders together in person, bringing teams over for off-sites and having Zoom calls can help create tighter bonds. It’s also important to include everyone in important calls and go overboard with training and support to get everyone on the same page.

International expansion never becomes simple — it is always more complicated than operating in a single company — but it can be very rewarding. Our international operations have given us the ability to serve global enterprises, understand how our product can be more valuable to a wider variety of clients and, of course, increase our revenue. If the right strategy is created and the right steps are followed, international expansion can be a smart way to take the company to the next level of growth

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