Buying an international business brings with it considerations and challenges that buying a local business typically does not. The decision as to whether or not to buy an international business is not easy and depends on numerous factors. In this article, we will look at several key tips for those considering buying an international business.
One of the most important steps you should take when considering buying an international business is to research similar businesses. You may understand a given sector of industry or type of business in your area, but operating a similar business in a different country may have more than its fair share of surprises.
You’ll want to investigate what it takes to make a given business a success in the country in which it is operating. The model you’ve used in your home country may not translate, at least not in every way, to a foreign location. It is only prudent to research other businesses in the international location so that you understand more about what does and doesn’t work. This could be the difference between success and failure.
A second tip to consider is to make the decision between relocating and hiring a business manager. There are some obvious pros and cons to each approach. Relocating to operate and oversee a new business is, of course, a dramatic life change. Such a large life change could help or harm the success of your new business depending on many different personal factors.
When accessing your situation as a whole, you may decide relocating isn’t the best option. If this is the case, then your best option may be to opt for a manager. Hiring a manager comes with its own set of risks, of course. That’s why investing the time to find a highly capable, experienced and trustworthy manager is of paramount importance.
A third tip to keep in mind is that there will be cultural differences. Many business owners have overlooked or downplayed cultural differences only to learn too late that cultural differences can have a great deal of importance and even wreck a business. Cultural differences won’t end when you officially take control of a business, and they will undoubtedly make an impact on operations. It is a prudent move to work with local lawyers, accountants, and industry specific experts to gain a full understanding of the business and how the local culture will impact it. Remember that not speaking the language, for example, could be a huge impediment to the success of your business.
In terms of impediments to your business, not knowing or understanding the regulations of the country and region in which you are located can also be a recipe for disaster. Once again, having local experts upon which you can rely can prove invaluable. Regulations vary greatly from country to country and region to region with everything from taxes to customs coming into play.
One of the best ways to protect yourself when buying an international business is to work with a business broker or M&A advisor. Brokerage professionals not only have their own personal experiences to draw from to guide you, but can also reach out to a variety of connections and experts around the world. Working with a seasoned business broker can be your first line of defense when buying an international business.