What to Consider When Doing Business Abroad
More and more women-owned businesses are expanding their businesses worldwide. There are all kinds of different questions to consider, not to mention pitfalls to guard yourself against, if you’re planning to do business abroad. Here is a run-down of some of the main areas you need to think about when you’re conducting your business across borders.
Business Banking
Finding the right business banking setup is a crucial first step for anyone looking to expand their enterprise with overseas sales. It is important to find the most cost-effective solution as a declining pound can easily push up the price of your imports. Review the different accounts and options available from a variety of banks. You should even consider switching your account as often as once a year to keep your options open.
When it comes to making and receiving payments most banks will offer you similar basic services, but it’s worth looking out for any added extras like a foreign currency savings account or a foreign credit card. It will also pay to get specialist advice on local business customs and cultures so that you can be well prepared before doing business with people from any particular part of the world.
Exchange Rates
A major concern for anyone doing business abroad is the exchange rate. Click here for an online currency tool which will tell you where the pound stands against other currencies right now. The most seemingly insignificant change in the value of the pound can lose or earn your business substantial amounts of money, so working out how currency movements could affect you and having a plan in place to deal with them is crucial. It’s not unusual for a British business to decide to complete transactions abroad in a different currency, such as euros or US dollars.
When changing currency you can either change at spot rates based on the current market rate at that moment in time, or you can insure against currency moves through hedging, such as with forward foreign exchange contracts which set the rate at which you change a set amount of money on a certain day in the future, or with currency options which give you the right to buy and sell currency at a set rate before a given date. Both give you more freedom and do not tie you to the fluctuations in the market, ensuring you have more ability to see through your own business plan. That way you can ensure you are well prepared wherever in the world you want to take your money. Ensure that you have the important documents with you at all times as different countries have different rules. You’ll be needing a PAN card seva if you are in India for tax records.
