Overseas expansion can be a tremendous opportunity for a business, but many companies hesitate before taking that first step outside the country’s borders.
Unfamiliar regulations, long-distance management and other issues can crop up, but the risk can pay off.
That was the case for of Landover, Md., a provider of management, administrative and meeting support for federal government agencies and contractors. The company had an enormous opportunity that required it to open an office in London, England. And it almost didn’t take it. But with the right advice and the right personnel, this global expansion paid off.
“As a small business, we were anxious about accepting work in London,” notes President and CEO Wayne Gatewood. “Our job was to set up operations overseas to support global conferences, events and gatherings by the international community. We had never been overseas. We almost turned the work down. We were leery about stepping outside of our comfort zone.”
Here’s how Quality Support ensured that its overseas expansion was a success.
Get the facts – and the forms
Business rules and regulations vary significantly from country to country, so a critical first step is to understand what is required to open an office in a given country. Gatewood quickly discovered that Quality Support’s first challenge was to apply for a license to operate in Great Britain. “We didn’t know how to do that,” Gatewood admits, so he hired an attorney who understood how to do business in Britain to get that done. Next came having to deal with offshore taxes and other requirements. “Our CPA explained that there were taxes we’d have to pay and certain documents we’d have to file,” Gatewood adds. “He got in touch with an organization in London that facilitates small business entry into Great Britain. They were able to work with him so we knew what documents needed to be filed.”
Manage processes (here and there)
Another critical hurdle for Quality Support was ensuring that the kinds of processes and logistics that were second nature at home could be transferred to overseas operations. For example, he needed to work with his bank to set up financial relationships on both sides of the Atlantic so he could transfer funds to and from the London office. Since there would be a number of one-time expenses related to opening the office, Quality Support needed to obtain a line of credit. This required Gatewood to show proof – in the form of signed contracts, guarantees and letters of credit – that his company would have the income to manage the loan. Even with this, the U.S. bank with which he had a long-term relationship turned him down. However, he was able to obtain the necessary funds elsewhere.
Choose the right people
For Gatewood, the success of the U.K. operation hinged on putting the right people in place, and empowering those people (who would come from his U.S. office) to manage the venture successfully. He realized it would be impossible to be a hands-on manager. “We employ the leadership training I learned in the Marine Corps,” notes Gatewood. “You have to delegate. If you don’t trust your managers to do what they need to do, you’ve got problems in your organization. You’ve got to hire people who can take care of their people and maintain employee morale.”
Build a reporting structure
With the right people in place, setting up clear lines of communications between the U.S. and the U.K. became crucial. This ensured that projects that required tight deadlines wouldn’t lag because of time zone or communication issues. “We had twice-weekly reports required from our people,” Gatewood says. “It covered what they worked on, any surge requirements, anything that required beyond normal work day hours, problems and perceived concerns, and what they needed from us here in the U.S. As much as it was their responsibility, we have to mirror that responsibility in the U.S. to give them the tools they need to do it.”
With the right planning, attention to detail and people in place, the whole process of global expansion can be more comfortable – and more profitable – than you ever imagined.
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