A CFO’s Guide to Expanding to Europe
Europe is the ideal region for companies looking to expand outside of their home market, offering a wealth of opportunities to expand your reach and increase profits. You’ll be pleased to hear that you don’t need to be a big corporation to consider European expansion. Whether you’re an SME, start-up, or remote-first business, any company can tap into the European market if you know how to. In this article we explain why expanding to Europe could be great for your business and how to make your European expansion a success.
Why You Should Expand Your Business to Europe
Opportunities for Growth
Whether you’re expanding into an emerging market or an established market, Europe provides a ton of opportunities for businesses that want to grow on an international scale. Europe is home to a diverse market as the region is economically interconnected. Across Europe, there is a range of places, economies, and populations for you to choose from. And once a business has been set up in one EU country, then they can then easily access the other 27 member states, some of which are the wealthiest countries in the world.
Europe is home to a highly-skilled workforce that your business can benefit from by making new hires. Not only will new employees bring a more diverse skillset, but they are also likely to have language skills that will be essential to have when communicating with clients in a new country. Tapping into the local talent market is also a much quicker way to expand than relocating employees from your home country.
Free Movement of Goods
The Free Movement of Goods is the removal of all trade barriers between member states in the EU, including tariff-based restrictions or different custom duties and restrictions on quantities imported or exported. Businesses established in the EU can benefit from no restrictions on quantities and no customs duties within the EU and EEA, making it easier to expand into neighbouring markets. It also makes moving products across borders much easier.
Opportunity to Save Costs
Europe also attracts businesses looking to save costs on shipping, transportation, and manufacturing. For many businesses, the savings made operating in Europe are worth the initial investment cost, although it may be high.
How to Make Your European Expansion a Success
Identify What Makes Your Product Unique
Assess your product or services to identify exactly what makes it unique to others on the market. Knowing your USPs and how they separate you from competitors is key, as this will be the foundation to cultivating your brand overseas.
Thorough Market Research
Thorough market research is always necessary when expanding your business to another country. On average, there are 748,347,253 people living in Europe, all with their own languages, cultures, and unique buying patterns. It’s crucial to factor in any cultural differences to ensure that your business and brand will be received abroad in the correct way. Remember, certain terms of phrase may not directly translate in another country. Every country will have their own local language, communication habits, and policies and it’s important to be aware of these.
Hiring New Staff
When expanding your company, you’re going to need new hires. It’s a good idea to recruit staff from the country that you’re expanding within. Not only is relocating staff costly but hiring locally will bring cultural awareness and possibly also language skills to the team which will help make the transition overseas easier. Remember, each country in Europe has its own rules in relation to employment laws and it’s important to stay compliant with these laws to avoid serious costs.
Identify Your Competitors
Whenever opening a new branch of your business, overseas or otherwise, it’s crucial to understand who your competitors are. Prior to your relocation, perform market research to identify exactly who your European competitors are, and what their strengths and weaknesses are compared to your company. This will help you to understand exactly where you stand and what you bring to the market.
Understand Your Target Market
Understanding your target market is key to succeeding overseas. In your market research, you need to identify what your audience cares about and how their behaviour drives decision-making. This will inform you how to communicate effectively with your customers and how you can build trust with them. Once you’ve done this, test your findings and assumptions with your target customers through surveys and focus groups to gain feedback and refine your product or service to better suit your target market.
Transferring money across borders whilst mitigating currency risk is one of the most challenging parts of international expansion. When a company is operating in multiple countries, having a smart and effective currency strategy is essential to succeeding overseas.
Halo Financial provides bespoke foreign exchange solutions to businesses to protect profits and mitigate risk for small and large businesses. Sign up for a Halo Financial business account today to start achieving more with your international transfers.