3 tips for businesses seeking to expand in a changing economy

Conventional wisdom might suggest that in times of uncertainty, one should play it safe. In the face of a market rout, rising inflation and stagflation, and talks of a global recession, companies may just heed that advice.

But this may be the wrong move.

“[In such circumstances], you can pull an ostrich and bury your head in the sand, but you’re still exposed to the market conditions and what’s going on,” says Charles Ferguson, general manager for Asia Pacific at employer-of-record firm Globalization Partners.

Charles Ferguson, general manager for Asia Pacific at Globalization Partners / Photo credit: Globalization Partners

“Or you can start to say, ‘What are the opportunities? Where’s the room to grow?’”

Economic uncertainty presents plenty of opportunities for businesses to tap into new markets and expand. But this is often far easier said than done, as companies need to strike a balance between chasing growth and protecting their bottom lines.

How can organizations effectively enter new markets and grow even further in the current macroeconomic environment? Ferguson shares some tips.

1. Do your research

This may seem like a no-brainer, but Ferguson highlights that this first phase is often overlooked.

“I’ve run a couple of startups, and when I expanded into new markets, I got so geeked up about the process that I didn’t realize how much work was involved and realized too late that it wasn’t a good idea,” he shares.

As expansion isn’t easy, businesses need to be sure they’re making the right bets. To do this, companies need to gain a full understanding of the markets they’re looking at. This includes learning about fundamental details around demographics and income levels and more complex matters such as government regulations and what kind of support is available for foreign businesses entering the country.

According to Ferguson, firms need to get down to the nitty-gritty details and understand whether they have product-market fit, who their competitors are, and what other business opportunities the market holds for their business.

“Many countries have economic development boards and chambers of commerce who you can turn to for resources and information,” he suggests.

In the current environment, compliance is also especially crucial, and businesses would do well to understand what’s at stake.

Not taking this into account “can really screw up your business, and the penalties are far more than just a slap on the wrist,” Ferguson adds.

2. Be tactical

Having done the research and identified key markets, companies need to think about making their plans a reality, and it’s important to be strategic about it.

“Gone are the days when you’d say, ‘Vietnam is hot, I think there’s an opportunity in Vietnam, so let’s fly there, set up, and go,’” shares Ferguson. “Now, businesses need to be more tactical about their expansion plans.”

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For example, a company may have identified Vietnam as an exciting market, given the growth of its tech scene and the investments that are pouring into the country. However, it’s also worth expanding that scope to adjacent markets, such as Laos or Thailand, to see what they have to offer.

In some cases, it may make more sense to tap into several markets at once or focus instead on a parallel market that has greater room to gain a foothold.

“Don’t go for the bright, shiny object every time,” advises Ferguson. Looking at a promising region and then honing in on where there might be a high probability of success may be a better strategy, he adds.

Being tactical also applies to how businesses make their forays into new markets. Setting up a new entity in a foreign country is often a tricky, tedious, and costly process that can take up to a year. In the end, the risks may not be worth the reward if the expansion bet doesn’t pan out.

The solution to this? Find ways to test the waters before going all-in on a market, Ferguson says.

Remote work has opened up opportunities for companies to hire in countries where they don’t necessarily have a physical presence. And employer-of-record services, such as Globalization Partners, can help companies set up in a new country by handling the entire talent management process.

Globalization Partners, which offers its services in over 180 countries, covers key human resources functions such as recruitment, onboarding, payroll management, benefits administration, time and expense management, helpdesk services, and local labor law compliance. It also allows businesses to hire and operate in new areas without having to set up a legal entity locally, minimizing the risks and costs involved with expansion.

“With global employment technologies, you can hit multiple markets at once,” explains Ferguson. “The beauty is that once you ascertain that it’s probable you’re going to be successful there, [these services] can be a stepping off point for you, and if it isn’t, then you don’t have all this infrastructure to unwind.”

3. Have the right partners and people in place

Connections are key, and that holds true for companies stepping into new territories. Having the right networks can open doors to fresh opportunities and guide businesses on how to navigate the foreign landscape.

For example, DIY-ing your expansion journey might not work in places like Indonesia, where foreign firms typically need strong local partners to give them a boost in credibility and access to the right connections and infrastructure.

“You can’t just go into a market being like, ‘What’s up? Where’s the success?’” says Ferguson. “You have to be willing to put your ego aside to ask for help and focus on the goal.”

Likewise, having the right people join your team can make all the difference. Localization is becoming increasingly crucial, especially as businesses expand beyond borders. Hiring local talent can help you navigate the social and cultural nuances on your journey.

“There is so much uniqueness in the world, and not every market is the same,” says Ferguson. “You have to understand the individuality of each of the markets you’re looking at and respect them in order to succeed.”

A time for pragmatic optimism

The road ahead is chock-full of uncertainty, but the current economic slowdown is a timely opportunity for companies to evaluate where they are at and where they want to be.

“It’s been this cavalcade of a series of unfortunate circumstances, but it’s not all scorched earth,” says Ferguson. “For founders and leaders, it’s time to have a conversation with yourself about what kind of person you are when it comes to the success of your business.”

Companies should certainly aim for growth and expansion in uncertain times, remain optimistic, and stay pragmatic about their operational efficiency and bottom line.

“The businesses that are going to be successful in these times are the constant optimists,” Ferguson concludes. “You have to keep one foot on the ground, and you’ve got to keep reaching, keep growing.”

Globalization Partners makes it fast, simple, and compliant to hire anyone, anywhere with its AI-driven, automated, and fully compliant global employment platform. The firm is a major sponsor of the 2022 Tech in Asia Conference.

To learn more about how Globalization Partners can support businesses on their growth journeys, schedule a demo today.

This content was produced by Tech in Asia Studios, which connects brands with Asia’s tech community. Learn more about partnering with Tech in Asia Studios.