How To Get Funding For International Business Growth

Considering expanding your business into international markets? Before you can realise your ambitions, you may need to look into options for funding.

Expanding overseas will inevitably come with expenses and overheads. You may need to hire staff, secure premises, apply for licences and registrations, and make deals with international suppliers.

So, how do you secure that vital funding for international growth? Read on to find out more about the options available to you, along with top tips on preparing your pitch and impressing potential investors.

Benefits of expanding overseas

There are a number of reasons you might set your sights on an international market as a UK-based business.

Here are just a few of the advantages and rewards on offer:

• Access to new markets and opportunities
• Enhanced global brand recognition
• A chance to boost innovation
• Access to a larger and more diverse talent pool
• Increased revenue and overall growth
• An opportunity to diversify business income
• Expand your customer base
• Gain a competitive advantage
• Cost-effective production opportunities.

But along with opportunities, expanding internationally also comes with challenges.

Setting up a business in a new country can be complex and expensive, as can hiring, understanding compliance and regulatory requirements, and forging new trade links and supplier relationships. This is why for many smaller businesses, expansion simply can’t happen until funding sources are secured.

Prove your business model in domestic market

Before you can explore financing for international expansion, and approach potential investors, you’ll need something to show them.

You should aim to develop an expansion strategy which proves the effectiveness of your business model in the UK market. It should also include a comprehensive roadmap of how you can replicate this success in your target international market. Your strategy should include everything from hiring plans to supplier relationships. And crucially, it should have clear financial targets and projected timelines.

Ultimately, you need to show investors that your business and its international expansion plan is a sound investment.

Understand the local market

International market research will be essential for making a success of your expansion plans. Without insight into your target market and its customers, you’ll essentially be shooting in the dark. You can’t assume that what works in the UK will deliver the same positive results elsewhere.

This is why you need to adapt your strategy, as well as your products and services, to the specific market. Key things to consider include:

• Detailed research into your target customer demographics
• Competitor research
• Pricing strategies
• Local hiring market and talent pools
• Culture and language.

You may also want to consider the potential risks of expansion, and make sure you have plans in place to mitigate these.

Prepare your pitch

Now we come to the crucial part of your plans to secure investment or finance for your overseas expansion. This is your pitch, which is how you’ll persuade potential investors to fund your business growth project.

Bringing together all of the research, strategy and planning you’ve done so far, you should aim to create a 5-10 minute pitch. This should combine and include all the key points, highlighting the opportunities for growth. However, you might also want to anticipate funders’ concerns and questions, acknowledging the risks associated with your plans and providing reassurance. Make sure everything you include in your pitch is backed by solid data or research where possible.

How to research investors

At this stage, you’re ready to start finding and approaching investors. The first thing to decide is whether you want to target domestic or international investors (based in your target market). If it’s the latter, you’ll want to raise money in their local currency.

You’ll also need to think about whether you’re looking purely for finance. There may also be the option to bring on board investors with experience or specialist expertise you could use to help your expansion.

When you start your search, a good place to start could be your professional network. There are also social platforms such as LinkedIn which could be useful for researching investor communities.

Other potentially useful sources could be** investor networks and government initiatives**. These connect small businesses and startups with investors, angel investors and venture capital vehicles.

You shouldn’t underestimate the power of in-person networking either. Consider attending industry events where you can speak to potential investors directly and pitch your plan.

Types of business financing

It’s also useful to know about the different types of business financing available. Here are just a few of your options:

• Investor (angel/ business partnerships)
• Equity funding and stakes in the business
• Crowdfunding
• Peer-to-peer finance
• Personal and friends/family financing
• Venture capital
• Government funding
• Loans/debt from individuals
• Business loans
• Credit card/ overdraft/lines of credit from financial services providers.

How to manage risks in financing international growth

As with any project requiring investment, there are risks involved in taking on funding or financing to grow your business internationally. Investment could fall through, or you could find it hard to live up to the performance and growth projections outlined in your expansion strategy and pitch.

You can’t predict or prevent everything that may happen, but there are plenty of ways to protect yourself and your business. This includes seeking professional financial advice, as well as legal advice for any investor agreement or contract you sign.

You should also set up a system at the start for** providing regular financial reporting to investors**. It may be useful to appoint a dedicated point of contact for your investors, and this person can actively manage and nurture the relationship.

Conclusion

With some careful preparation to find and secure business funding for international expansion, your ambitions for growth could be within your reach.

This time, effort and research could be well worth it too. It could open the door to new opportunities, markets, customers and revenue streams, as well as helping you edge ahead of the competition and boost your global brand.

However, there are challenges on the road to international growth. This includes how you’ll actually get paid by your investors, and pay them back in return.

Wise Business can help with this, enabling you to get paid in 8+ currencies and make your own payments in 40+ currencies.

It’s easy, secure and cost-effective to pay investors, suppliers, staff and contractors in 150+ countries with Wise Business.

You can even automate processes, make batch payments and sync with accounting software to make financial reporting a breeze.

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