Doing business abroad


Preparation is key to success

For the individual company, moving from being exclusively Danish-based to being international is a big step. Big steps need to be planned and carefully thought through.

Establishment abroad

Many of our clients have business opportunities internationally – and we are with them all the way. Beierholm is an independent member of HLB — the global advisory and accounting network. In 2020, HLB was named ‘Network of the Year’.

The members of the HLB network, like Beierholm, are large independent firms in the respective countries. This means that Beierholm’s clients can always get access to competent advice and service of the same quality and with the same local anchoring in virtually all business centres across the world, corresponding to the services Beierholm offers its clients in Denmark.

Each member firm of HLB is a separate and independent legal entity which is owned and managed locally. It is also very important for our clients to know that our HLB colleagues are familiar with the special conditions applying in their particular corner of the world. Like Beierholm, our colleague firms are large, independent businesses in their respective countries and are thereby able to provide our clients with a competent local partner, even if it is far from Denmark.

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Preparation is key to success

Internationalisation of a company is a process that, depending on the nature of the company, takes place by internationalising sales, purchasing, production, service and financing etc. The decision to internationalise a company is a strategic decision and requires careful consideration. There is no reason to believe that a company can do well in international markets simply because it has been successful in the domestic market.

Sales are the foundation for a company’s existence

The most important decisions in the internationalisation of a company concern the company’s sales, as sales are the entire foundation for the company’s existence.

Crucial conditions for internationalisation

The crucial conditions for a successful internationalisation process are that

•    organisation
•    capital base
•    production capacity
•    existing product range 
•    product development
•    are all adapted to the adopted strategy.

The company’s strategic development must be perceived as an ongoing process which is constantly being adapted to the changing conditions in and around the company, and which determines the assumptions on which the company goals and strategies are to be based.
 

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    Start by asking simple questions

    The company’s strategic development towards internationalisation may start with simple questions such as

    • Why do we want to do business abroad?
    • What do we have to offer foreign markets that they do not already have?
    • Which foreign countries do we want to do business in?
    • What goods do we want to sell – and particularly – what goods will foreigners buy from us?
    • What will they pay for our goods abroad?
    • Do we have the staff resources and the basis, including language skills, for seeking to sell our products abroad – without destroying our Danish business?
    • Do we have the financial resources to invest in sales abroad, and how much are we prepared and can we afford to invest?
    • Could we get more out of investing the same money and resources in our home market?

    Break down the business foundation into subareas

    In other words, the strategic considerations start with an assessment of the entire business foundation, which can be broken down into the following subareas:

    • Product types
    • Customer groups
    • Geographical markets
    • Price and quality structure
    • Physical and technological resources
    • The company’s position in the industry
    • Staff resources
    • Financial resources.
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    Motivation

    There will always be a motivation behind an internationalisation process. Perhaps the Danish market has become too small to generate profitable sales of the company’s products, or perhaps the company believes that its success in Denmark can be repeated abroad. Perhaps large development costs require that the launch of a new product needs to take place in a market which is larger than the Danish market, or perhaps the pressure from competitors in the Danish market is so hard that this in itself is a motivating factor for ‘escaping’.

    Another motivation could be the management’s desire to try their hand at the big world in order to create a more exciting business for the management and the employees, a belief that investing in several different markets offers better opportunities for risk diversification and thus greater certainty of positive earnings, and finally the possibility of using cheaper labour for low-tech jobs may be a motivation.
     

     

    Prepare yourself for the fact that change is the only sure thing

    When taking large steps such as internationalisation, it is important to realise that we live in a dynamic world where the only sure thing is change. The outside world is developing, and you can try to assess this development by asking yourself the following questions:

    What changes and trends can be expected with regard to:

    • The development in demand in existing and potential markets?
    • The relationship between supply, demand and price level?
    • Changes in customer needs and customer habits, and how these changes affect demand?
    • The technological development?
    • Changes in the pattern of competition?
    • Changes in distribution patterns?
    • Legal intervention?

    Careful considerations are necessary, and the activities must be planned to avoid concern and unnecessary costs. Preparation is key to success.

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    Our participation

    Through performing our audit and other of our basic services for our clients, Beierholm has acquired indepth knowledge of the conditions of our client companies. This knowledge means that we as auditors believe we can help our clients – also in connection with an internationalisation process.

    Many of our firm’s accountants have extensive international experience. In addition, through our membership of the global advisory and accounting network HLB, we know auditors in most of the countries where Danish companies currently wish to establish themselves.

    When our clients establish themselves abroad, our advice is usually provided in a collaboration between Beierholm and our colleagues in the country in question. The individual member firm’s work is subjected to quality control upon joining HLB as well as on an ongoing basis.

    Thus, in our experience the advice you receive from our foreign colleagues, according to the level of the country in question, corresponds to the quality level we offer our clients.

    Contact our international team

    We are close to you

    With Beierholm, you get a sounding board that can help you internationally. Contact our team of country partners. An informal talk might help you to step across the borders.