Managing Due Diligence in a New Market
A robust due diligence process is a crucial part of any business expansion, but it is especially important for overseas growth. Here, Galvin International explores some of the ways in which in-depth due diligence can help your business throughout its international expansion.
A focus on due diligence should be a part of your expansion process from its very first stages – including the period of time that you dedicate to researching and carrying out detailed analyses of your target market. This stage of your expansion is your opportunity to determine the best possible strategy for entering your new market. You will need to assess factors ranging from the level of market interest in your product or service, to the quality of the market’s existing infrastructure. Even differences in business culture and local customs can impact the successful entry and establishment of your business once your expansion is underway.
A failure to carry out adequate due diligence at this stage can affect even the biggest companies – brands as well-known as Starbucks, Walmart and Tesco have all faced high-profile expansion failures after failing to carry out adequate due diligence, and properly research and understand aspects of a new market.
In international business, preparation and planning are essential, and averting complications pre-emptively, rather than responding to them when they occur, is always the preferable option.
One of the most significant roles that due diligence should play during your expansion is ensuring that your business remains fully compliant.
In particular, a rigorous due diligence process should be followed with regards to your tax liabilities and your international accounting. Your tax and financial requirements will vary depending on the country you are operating in, so understanding the intricacies and obligations of your target market’s system should from an important part of your market research and entry strategy. Once you are operating within your new market, a constant level of diligent oversight will ensure that your business does not stray into accidental non-compliance.
This is one of the aspects of your expansion in which finding the right local knowledge can prove particularly useful. Whether you consult local financial and accounting experts, or form a partnership with an established company within your new market, local experts can provide help with navigating unfamiliar financial systems.
Carrying out due diligence is also an important part of ensuring that you are not exposed to corrupt or unethical business practices. When dealing with any third parties as part of your expansion, it is important to look into their backgrounds and reputations. This due diligence should involve an examination of any information and financial records which are available, but you can also enquire directly to the third party about their own policies on bribery and corruption. All business transactions and communications should be carried out in a transparent, visible way, to ensure that your own ethics or behaviour cannot be called into question.
How Galvin International Can Help
When it comes to doing business abroad, the importance of due diligence cannot be overstated – but attempting the entire process yourself can be overwhelming. Galvin International’s expansion concierge service untangles the complexities of the international expansion process, providing you with custom strategies and on-ground support with implementation. We ensure that you remain fully compliant and efficient throughout your expansion.
To find out more about how Galvin International can help your business achieve global growth, please get in touch.
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