Pros and cons of moving your business beyond Australia
Australia is your home and your business’s heartland. You have won over Aussie consumers and created a stable and loyal customer base.
You have been successful here, but you have come to the point where you must decide whether you are going to expand by taking your business to the world. So, should you go or stay?
These days it is not just a question of staying or going. Technology and innovation means the world is drastically smaller. Australia enjoys some of the world’s best trade relationships globally, including its top four partnerships with: China, Japan, the USA, and South Korea.
Recent pacts including the Singapore-Australia Pact and the China-Australia Free Trade Agreement have opened up opportunity for Australian businesses, making it easier to branch out to new destinations safely.
Here is what you need to consider:
There are many and different reasons to expanding a business abroad including:
- More people = more potential customers: Simply by increasing your possible customer base, you have the opportunity to convert more sales.
- Better economies of scale: More customers and more sales give you the associated benefits of greater economies of scale. Products can be produced in mass, and generally, unless your product is super specific, for less money.
- Better innovation: Hubs such as Silicon Valley, London, and Singapore are renowned environments for innovation in businesses.
- Multiple eggs in multiple baskets: A broader customer base in multiple countries means you simply do not have all your precious eggs in one country’s basket. What that means is in today’s unstable economy is that you, and your business, are not dependent on the economy or spending patterns of one country. Preparing for the worst-case scenario.
However, expanding abroad is not for everyone. Here are some key reasons to stay put:
- Your product is Australian: You have something uniquely Australian that simply cannot be bought, produced, or sold outside of Australia.
- Your audience is distinctly Australian: Not only is your product made from 100% Australian materials, the actual product is built specifically for Australians.
- The risks are potentially huge: The risks associated with expanding abroad including legal, political and exchange rate, all of which could have a huge impact on your business.
- Not being able to put a name to a face: Not being present all the time will mean you will not be able to create as strong relationships with both customers and suppliers as you would have back home. This opens you up to the risk of people not paying or orders not being up to your normal standard.
So stay or go? There are advantages and disadvantages to both, but what it really boils down to is what you want from your business and if it is a model that can expand to overseas.