Is your business suffering due to the local government restrictions during this pandemic? Do you see a sudden spike in operational costs post Covid? Are you worried about the disruptions caused due to resource shortages?
Businesses of all sizes have long-known the benefits of expanding their operations overseas, however it's the large organizations with deep pockets who often take this plunge. MSMEs which account for a large amount of exports for any country often end up restricting their operations to their home countries as they tend to be risk averse.
This pandemic however has brought a sense of urgency and a need to remain vigilant. MSMEs may have to understand that expansion in operations can provide several advantages, including greater opportunities for market growth and diversification. With digitisation, the entry barriers have reduced considerably and so is the associated risk.
Hence, for companies who are still sitting on the fence and are unable to decide on the forward path, consider these five benefits of operating out of multiple countries
#1 : Diversify Risks
There’s a cliched idiom that truly suits the present situation, "don’t put all of your eggs in one basket." Even if there are economic meltdowns or natural disasters, the business will still have the ability to thrive and can protect a company’s bottom line against unforeseen events. Multiple operations in different countries can offset negative growth in one market, by operating successfully in another.
#2 : Better Profit Margins
Financial motives is the most important motive for having international clients in a foreign market. There could be a case wherein the customers/clients belong to a country with a strong currency value. This definitely would lead to getting better and higher rates generating more revenue with increased profitability.
#3 : Tap the untapped potential
Establishing a base of operations in multiple countries opens up a completely new base of potential customers too. It allows faster growth for businesses with a wider global footprint, and new audiences to experience the product or service. This whole activity also opens up doors for further expansions and better visibility.
#4 : Access to local talent & shared pool of resources
Wider base for operations gives access to a pool of potential talent with unique skill sets. As an added bonus, local talent with these skills will give an edge over the competition. Shared pool of resources with the local partner brings in unique advantages in terms of increased productivity, advanced language skills, diverse educational backgrounds and much more.
#5 : Government Incentives
Some countries are notoriously anti-business and live with this anti-business attitude. That’s why more and more companies are deciding to move to other parts of the world as many governments around the world offer incentives for companies looking to invest in their region. The prevalent incentives are not only offered by the local governments, but also by some cities and provinces. The kind of incentives that businesses often take advantage of include, but are not limited to:
Financial incentives such as grants and loans
Reduced, exempted, or significantly deferred taxes or duties
Infrastructure development guarantees
Some type of preferred or otherwise preferential treatment in the domestic market
Significantly reduced regulatory requirements