What’s My Overhead? Budgeting for Global Expansion
Understanding and managing your overhead is crucial to keeping your company on track financially as you pursue international business expansion. But as you enter a new market, you may not be aware of all the expenses you’ll encounter throughout the process of setting up. Here, we’ll discuss costs that are commonly overlooked when expanding your business and how you can manage them, so you can make the most of your financial resources.
When approaching overhead costs, you need to determine what your largest investments will be based on your business model. Of course, you already have a grasp on some of these expenses from running daily operations in your home country – but be sure to consider the following costs, as well:
Understand the regulatory climate
Certain expenses will be dependent on the regulatory climate of your industry within your chosen expansion location – for instance, fintech businesses will have different requirements from companies in the pharma or biotech space. Meeting these costs plays an important role in setting up a compliant foundation for your company in a new market.
Remember business registration costs
Business registration fees vary from country to country and depend on the type of company you are establishing. Though they can be quite low cost, it’s still important to take these expenses on board, as they’re essential to getting your business up and running.
Consider benefit costs
Companies must remember that overseas benefits can vary widely due to different customers, social security regimes and taxes. For instance, companies often have to offer medical plans overseas in order to attract high-calibre staff. In addition, pension and employee termination costs can vary widely from country to country.
Budget for corporate compliance and professional services
When you expand business globally, you’re likely to need support. Though you may be tempted to keep things like HR or accounts in-house, outsourcing these tasks can provide you with in-depth expertise in your target market’s requirements in these fields and ultimately save you time and money. Therefore, your overhead should include the cost of any professional services you require, from legal, to HR, to accounts, to payroll.
Calculating your overhead before you move forward with your expansion plans equips you with the knowledge you need to plan a financially secure, successful expansion. An accurate estimation of your overhead will require in-depth research of your target market and careful analysis of your business’s needs, but investing the time in this preparation can make all the difference as you set up your international business operations.
Whether you’re budgeting your overhead expenses or looking for the right compliance experts, Galvin International can help. As an international business expansion concierge service, we are uniquely positioned to meet all of your company’s needs for global growth through tailored solutions. We get to know your business, developing an in-depth knowledge of your expenses, operations and goals to create a growth strategy for market entry. We connect you with local experts to ensure that your business is fully compliant, with all the necessary resources to hand.
Get in touch with Galvin International today to learn how we can prime your business for international success.
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