Have you been thinking of expanding your business into new territories and taking on new markets? Are you looking to set up a European branch so that you can simplify your trading an tax arrangements post-Brexit?
Whatever the reason, more and more British companies are choosing to extend their reach with branches in different European countries, so it’s important to understand what the pitfalls involved in this are, how you can avoid them, and how you can make your new venture a success.
Develop your strategy
Simply opening up a branch in a foreign country and assuming you can start trading the same way you do at home isn’t likely to get you very far. Before you begin, you need to have a clear strategy in place for marketing and selling your products and services. You’ll also need to have a fully structured supply chain worked out, with the necessary deals in place, so that you can be confident that your production will run smoothly. All this requires careful forward planning, especially as you’re likely to find that things don’t work the same way in your new country of operation as they do at home. You’ll encounter different ways of doing business and even different ways of communicating. That means it’s a good idea to spend time in your chosen country to get used to how things work before you invest a lot of money in setting up a branch.
Plan your finance
Any new branch is likely to absorb a lot more money than it makes for the first few months or even years of operation.
That means you’ll need to transfer money from the UK to Spain or the location of your choice at as low a cost as possible. It’s advisable to use money transfers for moving large amounts and to keep a close eye on the exchange rate to make sure you don’t lose too much money when transferring funds. You’ll also need to know the tax law and regulations in the country where your new branch is based. You must understand not only the costs they might cause but also your duties in terms or reporting your income and transactions.
Pick the right people
If your branch is to take off, it will need a good local team. Some people are able to manage branches effectively at a distance, or choose to spend their time travelling between them, but that is a lot of work and is generally not as efficient as having a manager on site. You will probably want to send over some staff members you trust, but having some local staff is a good idea because, if they’re well chosen, this gives you instant access to local expertise and helps you to find your feet in local networking spaces.
Setting up a new branch always involves an element of risk, but the rewards can be huge. With good planning and a diligent approach, there’s no reason why you shouldn’t make a success of it.