The expansion will include over 30 new stores with relocations already underway. Four of the new stores will be amongst the largest in the Poundland group. The first of the large stores will open in Nottingham Riverside Retail Park in February. It will have over 18,000 square feet of retail space, making it three times larger than a typical Poundland store. Meanwhile, the discount retailer also plans to extend its chilled and frozen food lines to around 100 more stores between now and September.
“The coming year will see us step up our transformation programme – including some of our largest stores and widest ranges – as we become the Poundland we know our customers want us to be,” said Poundland managing director Barry Williams.
“From groceries to clothing, homewares to frozen food, day by day we’ll continue to bring much more to customers in new and exciting stores tailor-made for where they live and how they want to shop.”
Interested in scaling your company, or has the scaling process already begun? We connected with Dan Kiely, CEO of Voxpro - powered by TELUS International, a leading provider of customer experience, technical support, and sales operations, to discuss how to scale your business, and the importance of maintaining focus on customer service as your company grows.
What is scaling your company all about?
If you’re scaling your company, congratulations! It’s an exciting time for all involved. At Voxpro - powered by TELUS International, we use the term ‘blitzscale’, which was coined by Reid Hoffman, Co-founder of LinkedIn and PayPal. Learning from the growth of other companies, we’ve realized that if you don’t scale fast enough, you’re going to lose your lead, or even worse – someone could take your idea.
In the early days of developing Voxpro, we had an idea for a new approach to outsourcing, and knew we had to act on it immediately, before anyone else did. We blitzscaled – we opened more offices, hired more people, and signed on more partners. After doubling our workforce and quadrupling the number of countries where we had a home base, we increased our services in two years. Then, in the summer of 2017, we partnered with TELUS International - a customer experience and digital services firm with a footprint across four continents. By joining our two companies, we are now backed by TELUS International’s robust global infrastructure and have an enhanced ability to offer a more comprehensive suite of solutions to the brands we serve to enable new go-to-market opportunities and growth in the digital and IT services market.
Scaling your company is about finding the right partners, but it’s also about hiring all-around good, hard workers, having a mission you really believe in, and creating a strong brand for your employees. Our experience as a former start-up, then scale-up translates into our innate ability to do the same for other brands, helping them scale their customer experience operations while they grow their business.
Why do you believe scaling customer experience and scaling business operations go hand-in-hand?
As your business grows, your customer base should ideally grow at the same or a similar pace. Growing your customer base means an increased number of support inquiries, and keeping up with demand to deliver a strong customer experience is crucial to maintaining your brand’s integrity and attracting and retaining customers. Take our partner Airbnb for instance. They went from hosting 300,000 homes on their site in 2013 to 3,000,000 homes in 2017. To meet the needs of their customers, Airbnb recently launched its Experiences and Places platforms, connecting their renters to local activities and hidden gems in the cities they are visiting. Giving power to the people, Airbnb increased its offering while managing a positive customer experience to meet the interest of its users.
As CEO of a growing company, what are some of your critical practices for relaying important information to your employees, and keeping the business moving?
When we created Voxpro, we set in place a series of values that we hold ourselves to every day. Sometimes, setting and understanding a company’s values can be overlooked, but not for us. Our values aren’t just words on a page, rather they drive our great company culture. These values also guide the partnerships we form, such as with TELUS International. They are a like-minded partner with similar values, and together, we are building upon our shared commitment to fostering and sustaining a caring culture focused on team member engagement and development, and giving back to the communities where we work and live.
Our powerful C-Suite leadership team that includes Jeffrey Puritt, President and CEO of TELUS International, keeps a pulse on our culture and employee engagement, identifying issues and putting forward solutions. We know that people want to be in an inclusive environment, even as a company begins to scale. Our values strive to ignite a sense of entrepreneurship, ownership and operational beauty in people. Through operational beauty, we encourage our employees to grow both personally and professionally. Having a purpose and mission that your employees can get behind will add motivation, plus heart and soul, to a company. This is ultimately reflected in the customer experience that we deliver.
The FinTech industry is seeing a number of companies scale at the moment. Are you seeing any emerging trends?
We partner with a number of companies who are in that “sweet spot” in the scaling process – they’re no longer a start-up, but they aren’t quite on a level of recognition internationally, or globally mature yet. Many times, these organizations are feeling the growing pains and recognize the need for a strong customer experience partner to ensure continued customer satisfaction and reduce customer loss. It can be a big step for companies to recognize that they need additional support, and a BPO provider in a lot of instances can be the smart choice when expanding.
Regarding FinTech, two of our partners who are leaders in the space come to mind. Both companies were searching for a partner to help manager their customer service as their businesses quickly grew. We partnered with them by offering a customized selection of services. Multi-channel, multi-lingual, and social media management were of importance to one, while our partnership with the other FinTech company focused solely on managing safety, fraud, and risk. In each instance, we were able to rapidly onboard and provide the necessary support, so their customers did not feel any strain from the expanding organization. Each of these partners’ needs are vastly different, and that’s what makes what we do and what we can provide so exciting. It’s not a one-size fits all model.
In what ways can scaling companies manage the customer experience for their clients in times of hyper-growth?
When rapidly growing a business, executives must come together to answer difficult questions in order to strategically plan for the future – “Can we do this alone? Do we need advanced services? Can we afford to make a change in staffing?” For some companies, outsourcing a sector of their business becomes an option, but sometimes companies are tentative to do so. It’s important for executives to understand that it’s more efficient and productive to focus on what you’re best at - your core competencies and what has made you successful to date - and seek a trusted partner in other departments, especially customer service.
Also, when rapidly scaling, the need to incorporate digital services and next-gen technology such as artificial intelligence and machine learning continues to grow. It’s important to have a trusted partner already invested in these capabilities and have a knowledgeable team in place able to harness the power of innovation to drive your new business outcomes and customer loyalty.After all, your customers are what drive your business and solidify your reputation in the market.
It’s important to keep your customers happy while scaling, of course, but what about your employees? How should growing companies respond to the challenges of retaining current employees and recruiting new ones?
As part of your growth, it’s inevitable that you’re going to have to hire and onboard new employees and also ensure the ones you currently employ continue to be inspired and engaged through all the changes. Ingraining your company’s values in new hires should be a top priority as these new employees have the potential to either help or hinder the execution of your company’s mission and strategy. Set yourself to a standard, and don’t stray away from it.
We have Voxpro University, which serves as a training resource plus a compilation of our branded learning and development tools, and TELUS International University, which enables our employees to earn a subsidized degree while working. These types of programs serve as a platform for all employees to learn about our culture and grow personally and professionally with us in order to meet the business needs of our partners’ today and tomorrow.
About Dan Kiely:
Dan Kiely is an entrepreneur through and through. Heading up Voxpro - powered by TELUS International, Dan thrives in the entrepreneurial realm. He dreams big and encourages innovation in all aspects of his company. Dan is now also a member of the TELUS International leadership team with TELUS International President and CEO, Jeffrey Puritt.
Optimism is high among SMEs across both Europe and the US, but is said optimism enough to warrant actual business expansion?
With investment in tech, especially AI, can SMEs afford to expand into new markets and regions? With tax cuts in the US, the new budget, incentives in the UK and confidence in markets all together, is optimism on the rise? Is this a year of your business expansion? What are your thoughts on the current climate, risks and opportunities?
In this week’s Your Thoughts Finance Monthly has heard from a number of top experts and businesses on their opinions and plans for expansion in 2018.
Rick Smith, Managing Director, Forbes Burton:
These days, with so many alternative funding streams available to entrepreneurs and established companies alike, it is easier than ever to get funding. However, this comes with an immediate danger and risk. How companies use this money is often the reason they run into trouble.
The tired adage of not putting all one’s eggs into one basket comes to mind, but it remains true. Diversifying, rather than concentrating on singular vision, is essential.
One thing we always advise companies to do is to think about having physical assets. Being labour-intensive and hiring equipment in the construction industry for example will only serve your growth so far. The lack of bricks and mortar or equipment assets can hit companies hard if things start to go wrong.
With so much uncertainty about, including Brexit, companies need to be mindful in order to be able to recover if things deviate.
Consider expansion of business premises or the purchase of a large, well priced piece of equipment. Ring-fencing that kind of value is wise and can be leveraged more easily. The danger in not looking for this kind of self-preservation is having to borrow more when you fall into a hole. By then it could well be too late. Growth is fantastic, but only when properly managed.”
Lewis Miller, Chief Financial Officer, Frank Recruitment Group:
When it comes to expanding your business in 2018, it isn’t a question of can you can afford to, it’s a question of can you afford not to?
Currently, the availability of cheap debt is at an all-time high; technology advancements are making it easier to invest in new capabilities and new markets, and trading internationally is becoming easier.
For these same reasons, competition is growing and getting tougher. If you are confident in your products and your capabilities, there is no time like the present to bite the bullet and invest in your expansion. If you don’t, it could be a decision you come to regret.
We are already seeing interest rates starting to rise and with strong wage rate growth being reported, this appears to be a trend set to continue. This will eventually place pressure on the economy. It’s impossible to predict the extent of which but I certainly wouldn’t rule out a recession over the next few years.
Expanding now, whilst the market dynamics are supportive will not only open up new opportunities, but the diversification will help protect your business in the event of downturn.
Having access to different markets can also give you a competitive edge with your customers as well as help attract new customers who are looking for a partner who can serve them across a wider array of offerings or geographies.
If you are looking at expanding this year into new markets, whether it be geographically or product, I would offer this one piece of advice – don’t assume that the secret sauce that has made you successful in your current market is the exact same secret sauce to enable you to succeed in new markets. You need to do your homework thoroughly across all key areas, such as; your value proposition; cultural differences in how people buy in the target market; laws and regulations; employing staff; and so on.
In SME’s, often we rely on our existing staff to drive the expansion agenda. Sometimes hiring or partnering with someone that has been there and done it in the market you are looking at, whilst costly, can be the difference in you getting it right the first time and really accelerating your growth.
Adam Schallamach, SME Growth Consultant, Business Doctors:
For a small or medium sized business, the timing of any decision to invest or expand is crucial to ensuring its continued success and, typically, owners will look at both internal and external factors before coming to any conclusions.
The external environment is confusing at the moment. For every article you find stating that business confidence is on the up, you can also find an article talking about how difficult conditions are. But, if you look through the noise, there are certain key themes at the macro level.
Despite it being 18 months since the referendum and nearly 12 months since Article 50 was triggered, we are no clearer about what the future relationship between the UK and Europe will look like. Obviously, if you are a business that relies on European interaction, this uncertainty could be crippling. But, even if you are not, the broader impacts of Brexit on the UK economy and its competitiveness, which could be positive or negative, will have an impact.
Interest rates are another key issue. As a result of inflationary pressures, the Bank of England is giving strong signals that there will be further interest rate hikes this year. These will impact the cost of borrowing and may raise pressures on finances going forward. However, interest rate rises can also have a positive impact on exchange rates altering costs for import/export businesses and supply chains.
As a consequence of Brexit, the Government is looking at how it realigns business related policies to refocus the economy. A major part of this is the Industrial Strategy which is intended to set out the broad vision going forward. Allied to this are the funding schemes/tax credits which are available and will continue to be available to assist business investment/expansion but it is clear that Government will increasingly use this tools to focus on particular areas rather than general business support.
However, whether the broader economic environment is up, down or sideways, businesses still succeed and prosper. And although there will always be exceptions, I would argue that for most small and medium businesses, the key is having a clear direction and strategy.
If a business owner knows what they want to get out of their business and has a clear alignment between that and their business objectives, that will drive what they need to do and when they need to do it. Worrying about external factors which are out of their control and even experts cannot agree on, is frankly a waste of time. So my advice is, if you do nothing else, take the time to revisit and refresh your business plan if you have one, or invest in pulling one together.
Mike Hoyle, Finance Director, Sellick Partnership:
We recognised early on that our financial year to February 2018 was going to be a big year for growth - not just for Sellick Partnership but for our clients and the wider economy.
Our temporary contractor numbers have grown steadily and the number of permanent placement has increased significantly on the year before. This reflects employers’ confidence in the market, indicating that they can afford to keep their new hires long-term.
Demand for recruitment services has increased across all sectors - including finance - and as a result, this year we are focusing on organically growing our professional services offering. We will strengthen our teams by recruiting more specialist consultants to make sure we reach our ambitious financial and operational targets for the next financial year - including surpassing £2m turnover for permanent placements.
These signs are all positive and optimism is certainly on the rise, but there still remains some uncertainty for business owners and employees alike. Although all things Brexit are definitely picking up pace, the remaining uncertainty creates risk, as businesses may struggle to properly plan for the future. With that in mind, it’s imperative that Theresa May pushes on with developments if we want a shot at further economic growth post-Brexit.
Mark O'Connell, CEO, OCO Global:
Market volatility in global equity markets in recent weeks might make you think 2018 has gotten off to a shaky start. But looking beyond this at the wider global economy, 2018 is shaping up to be a promising year for SMEs and could be the year for expansion. Last year, only just over one in ten UK SMEs exported, with businesses missing out on significant opportunities in markets outside of the UK.
2017 saw the return of a booming Europe. Key markets such as Germany, France, Italy and Spain are growing at the fastest pace in a decade and have not yet been fully explored. The German market in particular is a key prize – friendly, accessible and well-disposed to quality and strong service support. The weakness of Sterling also makes UK exporters more competitive than ever right now.
Uncertainty surrounding Brexit arrangements is also prompting many to look further afield for opportunities for growth. In the last year we have seen a significant increase in companies exploring North America. New tax friendly policies in the US have boosted small-business optimism, government-related cost pressures continue to ease and consumer spending remains strong. The US presents a supportive business climate for small firms and a wealth of opportunities.
The benefits of exporting are manifold; diversifying an export portfolio can increase both sales and business stability. A wider base of customers and distributors results in a more resilient business that is able to weather downturns in one or more markets, or offset quieter seasonal periods in one part of the world. Additionally, exporting exposes a business to new ideas and supports innovation. And one thing which UK SMEs are regularly chided for is ‘lack of ambition’: the fact is that more internationally diverse businesses achieve higher exit valuations, so don’t just fly the flag for the country- fly it for yourself.
Adrian O’Connor, Founding Director, Global Accounting Network:
There is no doubt that organisations of every size are increasingly taking a global approach to future expansion plans. It may sound like a cliché, but rapid technological advancements mean that geographic borders are not the barrier they once were - the world is getting smaller. Meanwhile, future uncertainty caused by myriad external factors, not least Brexit, is encouraging smart business leaders to explore opportunities outside of the UK. It’s no wonder that a growing number of organisations are looking to capitalise on favourable market conditions elsewhere, or simply hedge their bets against unpredictable local economies.
Recent client demand, and subsequent recruitment activity, reflects this growing thirst for international growth. The organisations we work with are increasingly seeking senior finance professionals who have experience within a global operation, are familiar with specific international tax structures or who have a solid background in analysing risk associated with global expansion strategies. Unsurprisingly, we have also witnessed job roles, and associated remits, shift in recent years to fit within business structures which are conducive to international operations.
While due diligence associated with overseas expansion expands far beyond the remit of finance teams alone, FP&A specialists who can provide detailed analysis of the strengths and opportunities of target markets - and management accountants who can advise on compensation packages based on local standards and customs - are highly sought after.
This is a strategy we have applied to our own growth plans and Global Accounting Network is expanding into the US this year. The decision was based on a similar market with a shared language and a business-friendly tax regime. International expansion is no longer a pipe-dream for the majority of business: it’s a logical next step for companies which have their ear to the ground and are looking to take their business to the next level.
Dany Rastelli, Global Marketing and Communications Manager, Elements Global Services:
2018 is the year for expansion. 2017 saw stronger growth than many had predicted and I think businesses are starting to look at their expansion timelines with greater optimism. Although companies will continue to proceed with caution in light of current geo-political events, they will no doubt look at international expansion with a view to offsetting negative growth in one market by starting to operate successfully in another.
With regards to Elements Global Services, we are certainly optimistic about what this year will hold for the company. As a global organisation we know our strengths, and are ready to put them to good use to achieve our short, medium and long term goals – no matter how ambitious they might seem. One example of our expansion plans this year, is our ambition to double our head count in the next twelve months across all offices.
It is clear that investing in tech, and more specifically AI, will be essential to a small business’ survival later down the line. In my opinion, this is a short-term (albeit costly) investment for a long-term gain that will give small businesses the competitive advantage. Companies are investing in their futures and it is widely acknowledged within the industry that automation and digitalisation will be the dominant route to market going forward. This influx of tech adoption now should see lower overheads further down the line, allowing for companies to become more profitable across a multitude of markets.
With the latest tax cuts in the US, incentives in the UK and a general confidence in the markets, I think a mood of cautious optimism has pervaded the financial markets in the last 18 months and the global economy has witnessed a positive trend developing. As a result, companies have started to look at expansion with more confidence than before. Although it is indisputable that the current economic climate is volatile, I personally believe that in every risk lies an opportunity. In 2017 the global economy far surpassed expectation and I predict that 2018 will continue this trend and allow businesses to expand and triumph in the face of both global and local adversities.
Chris McClellan, CEO, RAM Tracking:
Despite the ongoing uncertainty around Brexit, and the value of sterling, UK SMEs are still operating in a dynamic and exciting business environment where expansion is a viable option. A recent survey by American Express found that 41% of UK SMEs cite their leveraging of the particular advantages they enjoy as an SME – such as adaptability, innovation and strong customer relationships – as one of their top three strategies for fuelling revenue growth in 2018. And this optimism doesn’t cease when crossing the pond with the recent US National Federation of Independent Business survey reporting one in five SMEs looking to both hire and expand during 2018.
Back in the UK, the American Express survey also states that the majority of those surveyed cite economic uncertainty the most significant threat they face – which has switched from political uncertainty within the same poll just a year earlier. While concerns are ever-present though, this is matched with increased optimism about the opportunities that are out there to trade and form strategic alliances, both in the UK and overseas.
Indeed, developing a specific overseas strategy is a clear advantage for SMEs particularly as it provides a safety net/ pool of new customers and suppliers to fall back upon, as the UK’s departure from the EU draws ever nearer and the weaker pound becomes more attractive for overseas buyers. According to KPMG, almost half of UK exports were destined for the EU in 2017, which demonstrates the dire need to start looking at forging wider global relationships now as a safeguard.
Naturally, global expansion requires a number of obligations around tax and culture to consider but the typical make up of a successful small business – which incorporates focus, strong working/ customer relationships and consistency – helps provide the ‘front’ required to successfully move beyond our national barriers. Financing is of course, an ever-present issue – and barrier – for some, but again, by utilising the agility and innovative nature of an offering and in-house team, investment can become much easier to source. For those not quite at the stage where they can do this, perhaps 2018 is better used looking at the business and how they can make it ‘overseas expansion ready’ in order to make 2019 or 20 the year when they truly elevate.
Indicating business efficiencies is a key element of driving success within existing efforts but this also helps in demonstrating the potential for an SME to move to the next level where expansion (in the UK or indeed, overseas, is concerned). This comes down to measures like ensuring that supplier relationships are properly managed in terms of spend and consolidating requirements down to the fewest suppliers possible. However, internal measures that drill down the day-to-day costs are always needed, an example of such measures is the use of vehicle tracking devices for employees out on the road, as these are very effective and also demonstrate that employee safety and well-being is proactively being monitored.
While nothing in life that is worth getting comes easily, it does seem that the current business landscape is 'expansion-ready' where SMEs are concerned – indeed, the expected uncertainty caused by the current Brexit negotiations actually represents an opportunity for SMEs to forge new relationships that are not as dependent on exiting the EU in terms of tariffs and taxation. So, in conclusion, go forth and conquer!
We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!
Your experience encompasses assisting companies with growing their businesses – what attracted you to this area of specialism? How rewarding is this?
With China’s economic development and growth over the last 20 years, more and more foreign companies have been expanding their businesses into China, either through direct investment or through increasing numbers of cross-border transactions. However, doing business in China has distinctive challenges that must be considered, not only because of the potential language barriers, but also because of various business-related regulations and tax requirements that are unique to the country.
Our consultants at Nexia TS (Shanghai) Ltd provide business and tax advisory services to global clients investing in and/or doing business in China. Our service offerings range from planning, structuring and the setting up of foreign-invested businesses, as well as a focus on tax consulting and advisory for all aspects of Chinese taxation. Chinese company and employment law advisory services are also offered. We are able to provide compliance work that caters to assurance and other statutory needs.
Since we established our practice in China in 2001, we have assisted many international companies with their inbound investments into China, setting up direct presence and fulfilling the domestic regulations. Overall, we find that our experience and expertise with the Chinese regulations and business environment have also benefitted our clients.
How should foreign companies structure their business operations to be as tax efficient as possible when considering expansion into China?
In our experience, we have found that the simplest structures are often the best. It is potentially useful for foreign parent companies to own their Chinese subsidiaries through offshore holding companies in low tax jurisdictions that also had favorable tax treaties in place with China. In many cases, multinational groups use layers of holding companies in their structures. Related party transactions between sister companies and the ultimate parent company were essentially designed to extract profits out of Chinese operations without being taxed. Things have changed since 2008 though, and China has implemented many new regulations intended to ensure that the country receives its fair share of taxes. Where a foreign company sets up and registers a subsidiary in China, it is now usually most tax efficient when the subsidiary autonomously performs its business functions. The more control the China subsidiary has over its operations, the better - especially with respect to participation in the VAT system. Furthermore, more autonomy from the parent company generally results in fewer issues with respect to expense deductibility for corporate income taxes. It is true that profits dividends paid to the subsidiary shareholders are taxed at 10%, or less in some cases, but there is tax savings over attempting to extract profits through royalties or cross-border services that are subject to both withholding tax and VAT. Foreign companies operating in China nowadays must take these issues under consideration.
For foreign companies operating in China without setting up a registered entity, there are also tax-related considerations. It is important to properly structure these transactions. For those that simply sell goods into China, the buyer of the goods handles all of the China-related issues. However, for those that sell services, or a combination of goods and services, into China, it is crucial to minimize the risks associated with being recognized as permanent establishment for corporate income tax purposes, and also to ensure that tax treaty benefits are applied to and recognized by the respective tax authorities. Likewise, VAT now applies to all cross-border service transactions, so proper structuring of the service agreements is essential.
What potential pitfalls face foreign companies who wish to set up a Chinese operation - in terms of staying compliant with regulation whilst wishing to operate under a tax efficient structure? What are the potential consequences of non-compliance?
Many foreign investors assume that setting up an entity in China that relies heavily on related party transactions may be very simple when using special purpose entities. For example, a US company might set up a holding company in Hong Kong, to take advantage of lower withholding tax rates on royalties obtained by selling IP usage rights to its China subsidiary. However, China has closed many loopholes with tax officials scrutinising royalty and other similar agreements. If certain criterias are not met, the royalty payments may not be deductible for the China subsidiary.
Another area often overlooked is how China’s tax rules have changed with respect to the indirect equity transfer of Chinese entities by offshore parties. Considerable paperwork must now be filed in China during such transactions, even if no tax will be assessed on the transfer. Penalties can be quite severe if the offshore transferer and transferee do not comply with the documentation filing requirements.
Since the introduction of the Corporate Income Tax Law in 2008, China’s State Administration of Taxation has implemented many new General Tax Anti-Avoidance Rules that allow the country to pursue foreign companies doing business in China and purposefully setting up the businesses or transactions to avoid Chinese taxation. With the advent of BEPS and increasing global cooperation between countries, it has become much easier for China to pursue such cases.
What tax incentives are in place for foreign companies who may want to establish business operations in China?
Companies within certain specific industries can enjoy corporate income tax breaks, and these industries are normally associated with high-tech manufacturing and R&D. In addition, Chinese local municipal governments attempt to attract foreign investments by offering tax exemption or tax rebates on the portions of VAT or corporate income taxes to which they are entitled. There are also incentives for companies investung in energy-saving and environmental protection facilities, which they can deduct a certain amount of their investments for corporate income tax purposes.
How can multinational companies move finances in an efficient way between their international offices?
Foreign companies with regional headquarters in China’s free trade zones have a few options for moving funds between China and other countries. However, China generally has strict foreign exchange rules in place that limit the movement of funds via profit dividends, loans, or other genuine transactions between the parties. Capital usually cannot be moved out of the country without closing and liquidating the business in China. Companies should plan exit strategies at the time of business setup. However, regulations are always subject to change, so such strategies should be analyzed continuously and updated as needed.
What are your thoughts on China’s One Belt One Road initiative? What’s been the impact of the concept on commodity demand thus far?
Unveiled in October 2013, the One Belt One Road initiative is a development framework aimed at enhancing trade and investment connections between Central and Eastern European countries and Asian countries. It not only plays a role as an important economic link between countries, that also helps to relieve some of the issues that were caused by China’s economic development during recent years, such as overcapacity, falling demand for commodities like steel, investment bubbles, lower rates of return on investment and so forth. The key to success of this initiative also depends on joint participation from other countries to bring in high technology to increase the rate of return on investments, instead of just building roads and bridges and ports, which are the key strengths of China in leading this initiative. The collaborative stance that China places on this initiative is very helpful. For example, it acts like entrepreneurs who would like to set up business with existing infrastructures and available financing.
According to the futures prices on steel and copper traded on the Shanghai Futures Exchange, the dominant Futures prices on steel and copper have been rising since 2016, which means that demand for domestic commodities has been gradually recovering. With more deals and projects announced in the future, we foresee that the demand for domestic commodities will continue to rise further.
What do you think the future impact of the initiative will be?
This initiative in the long run will benefit the global economy as a whole, and help rebuild economic interactions between countries that were in existence before the 2008 economic crisis. It not only increases the routes by which transported goods can reach destination countries around Asia and Europe, but also revitalizes the economies and unlocks potential demand from the One Belt One Road countries.
By Zak Goldberg
Much like any new venture with a business, it’s a smart idea to first fully assess a number of key financial considerations with your international expansion, to make sure it’s the right move for your company.
International expansion can bring a wealth of benefits including: increased sales, more exposure for your brand, opportunities to work in other niches and much more. So, before you start making your first steps abroad, think about some of the following to get your finances in order:
The Cost of your Expansion
The first place to look is at the possible expenses incurred from your expansion. This might cover a variety of areas like:
The next step here is simply be realistic about whether or not a full-scale overseas expansion is something your business can afford.
Potential Sales Revenue
When researching the location for your expansion, you will have probably looked at aspects like how receptive the markets are to your products or services. As well as this, you should use this information to inform the potential revenue you could expect from successfully working in this new country. Having a clearer idea of the possible ROI at stake could also help you determine how quickly you could recover financially from your expansion investment.
Extra Overseas Operational Costs
You’ll already appreciate just how much you need to manage and think about for your overall domestic operations and ultimately the same will apply for any locations you set up and start running overseas. You can’t simply double the typical costs of this though as you might also need to pay for local staffing or external support in areas like:
After you’ve done some initial planning, you may also want to look into how you can source additional funds to support this. The bigger your cash reserves the better placed you’ll be to facilitate your growth and there are several different ways you could go about this.
You might want to look at securing a business loan from a bank or lender, or pitch your expansion ideas to your investors to see if they put forward more capital for this. Anything you can gain financially, whether large or small, can be incredibly valuable.Final Thoughts
Once you have taken the above into consideration you should then be in a better place to go ahead with your expansion. A final piece of advice here would be to make sure you regularly report and reassess your financial situation, as there might be instances or circumstances where you need to spend more than you first thought. This way you can move money around to support the different areas of your company that may need it.
About the Author:
Zak Goldberg is a Law & Business Graduate from the University of Leeds who has chosen to follow his aspirations of becoming a full-time published writer, offering his expertise on FinTech and business economics.