The international trade landscape is constantly shifting, due to: changes in governments, the introduction and changes to free trade agreements, a continued focus on technology and innovation, and other economic and political factors.
For Australian businesses that have not yet “gone global”, these changes continue to present opportunities, whether that’s starting a business overseas; exporting goods and services to new markets; or outsourcing certain functions of your business to international businesses at a lower cost for a higher return.
Doing business overseas is often challenging due to different business cultures, local legal requirements, language barriers and the absence of trusted relationships. These factors make careful planning essential for overseas business success.
As a result of this complexity Australian businesses entering an international market will likely benefit from an international perspective – this could mean seeking advice from colleagues, peers or professionals who have been there and done that; or employing skilled workers who have lived and worked overseas and can manage the transition, add innovation, and improve your business with their diverse external perspective.
If your business has international ambitions, here’s how you can leverage knowledge from people with relevant international skills and experience to grow your business.
Recognise your limits
Many businesses attempt to achieve their international goals through the efforts of the business founder or another senior executive. Resourcing international business this way can be expensive, and can distract these key executives from other strategic or operational imperatives in the business.
Although this approach can work, businesses need to consider not only whether these key people have the relevant skills and experience to achieve international goals, but also whether the business can afford for them to dedicate a significant portion of their time to the international side of the business.
Undoubtedly some involvement of key executives will be essential in international decision making, but at some stage, these people will need to choose whether to prioritise the day to day operations of the Australian side of the business or the international business. What will it cost the Australian business for these key executives to not be available?
In many cases, balancing the tasks between key executives and consultants providing quick access to relevant skills and experience will provide an effective solution.
Planning and due diligence
After 20 years of advising international businesses how to set up shop in Australia, I’ve learnt how important preparation is when it comes to doing business internationally.
Just like any major business decision, export and trading internationally is something you need to spend time researching and planning for – so before jumping into anything you need to take your time and do your due diligence.
For those who are thinking of setting up a business overseas, an early objective should be to spend time in that country, establishing trusted relationships with locals, expats and advisors who have done it all before you.
Similarly, with e-commerce making it easier to buy and sell goods from overseas, many businesses fail to look into the import/export regulations or tax implications of each market. If you’re looking into exporting your goods or services to new markets it’s essential to do your research and reach out to anyone who has done it before you to uncover any pitfalls.
Bring the outside world in
If you’re looking to do business internationally, you should carefully consider bringing an international perspective into your business through gaining quick access to relevant skills and experience.
The extent of your international plans will dictate whether you need employees or consultants. Whilst in some cases there might be Australian workers or consultants that can provide the required expertise, there may also be times that you need to source skills from overseas to work in your Australian business to support your international plans. There may also be instances where you need to have one of your Australian employees work in another country.
Despite the constantly changing immigration regulatory environment, there are still many instances where skilled foreign workers are seen as essential to a business. This is not only because there is a shortage of suitably qualified workers in some occupations in Australia, but a skilled migrant can also be a useful ally and representative when it comes to international relations.
While the numbers have decreased slightly, Department of Immigration and Border Protection statistics show that at 30 June 2017 there were still 90,590 primary 457 visa holders in Australia, which indicates that Australia’s 457 visa program remains relevant and necessary. Interestingly, more than 71% of these workers are located in New South Wales and Victoria, and more than 11% of these workers hold management positions.
Having the skills your business needs on-hand means you’re in a better position to respond to market demand for your services, but more broadly than this, skilled foreign workers can bring a unique perspective, a wealth of experience, refreshed work practices, and work ethics that can add an enormous amount of value to your business.
With that being said, if you are looking to employ a skilled worker from overseas keep in mind that you may have little control over timing.
A company can find their business disrupted when they don’t plan adequately for immigration requirements, or they’re not successful in obtaining the visas their people need by the time they want them to start work. This can be risky, as in extreme cases a failed attempt to obtain a visa can result in the applicant, or the company, being barred from certain countries.
It’s also important to be aware of government changes and how this will impact your business. Immigration and tax rules are altered so frequently that the only thing you can count on is change, which means you need to give yourself and your business enough time to adjust flexibly.
Seek advice and ask the professionals
I’ve worked with a number of small to medium-sized Australian businesses who have the ambition to go global, but often don’t have the knowledge, skills or available time to make it happen.
Whether it’s importing goods, outsourcing tasks, setting up an office in Hong Kong or selling products in London, you need professionals to advise you so you can have the best chance at success – and can also avoid any major drawbacks along the way.
One thing I’ve learnt in working over 20 years with international businesses is that doing business internationally and entering new markets, particularly when it comes to the law, is not the kind of thing you want to try and work out for yourself.
You need to call on trusted and reliable professional consultants – who are registered in their specialisation – to guide you in terms of financial reporting, taxation, immigration and other compliance requirements. This way you can focus your time and effort being spent on the things you are best at which will help your business thrive.
Contact your Bentleys Advisor, or contact us to discuss further.