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Why aren’t companies expanding abroad?

Global Operations Director

Expanding abroad is good for business — firms that export consistently outperform those that have stuck to domestic markets, and international trade helps boost and stabilise the global economy. Whether you move into an established or an emerging market, there's scope for a rise in profit and productivity when you look overseas.

So, if going global is such good news, why isn't everyone doing it? For a new report from Regus businesses were asked what they thought the biggest obstacles were to setting up abroad.

Property costs and paperwork easily topped the survey. 60% of companies listed them as one of the top three barriers to setting up a physical presence abroad. Many firms (42%) were also worried about the problem of building a brand overseas: if no-one knows you, then it's hard to earn trust.

Given the worries about paperwork and costs, it makes sense for a company to find offices that give a convenient and flexible foothold in a potential market. Conventional leases are likely to be too restrictive; you can't know how quickly you might need to grow. Regus services and products allow you react to change quickly and so manage the risks of expansion – and the local property paperwork is taken care of.

An office in a prestigious location will also help take care of branding issues – holding a meeting in a well-located, well-maintained and well-appointed office undoubtedly sends the right signals to local business.

The report also asked companies which regions they believed would be most profitable to expand into over the next two years. China came top, with 48% of companies putting it in their top three, followed by Europe on 41%. Other emerging markets also showed strongly – 31% of firms have an eye on expansion into India and South America.

Again, it makes sense to talk to a company with experience in these regions, one that knows your country and the country you're looking to move into. Regus has already expanded into 99 countries around the world, and combines local knowledge with international experience.

Photo: Container ship, by jdnx on Flickr)

Breaking new Ground Photo: Container ship, by jdnx on Flickr)