It should go without saying that choosing to sell or buy an international business is not a decision that should be taken lightly. The process requires understanding, knowledge and detailed research, as well as a touch of expertise. While you certainly have some planning to do when buying or selling a business overseas, the effort you put into your preparation vastly improves your chances of ending up in a more favourable position.
Why buy a business abroad or sell your business to an overseas buyer?
An estimated 333.34 million companies were operating around the world in 2021. Whether you are looking to sell or buy a business abroad, you are faced with a wealth of opportunities.
Some of the benefits of buying an international business include:
- Access to a new marketplace
- Existing brand recognition and customer loyalty
- Established suppliers
- Recognition by local authorities as a local business
Some of the benefits of selling a business overseas include:
- Increased chances of finding the best fit for your enterprise
- Some international buyers come with the experience and the funding required to scale the business in a new market
What challenges might you face?
Whether selling or buying an international business, you could find yourself facing several challenges. The most common of these include:
- The language barrier: Hiring an interpreter or translator can help you overcome this challenge.
- Local customs and culture: Ensure you research and understand cultural and business etiquette in the target location to prevent miscommunication and not cause offence.
- Compliance with local laws and regulations: Get advice from local specialists such as labour experts, labour lawyers, and international tax lawyers to ensure the business complies with local legislation and can operate effectively.
- Different time zones: Consider adjusting your hours to accommodate any time differences. Considering time differences also comes into play for international payments, however choosing a provider like NewbridgeFX that offers fast international payments means you do not need to worry.
- Transaction and pricing structures: Establish expectations around buyer deposits, etc., early in the process to reduce the chances of frustrations and delays later.
Other challenges may include the timing of the transaction, acquisition document format, and the choice of law and jurisdiction that should be used to govern the acquisition documentation.
Tips for buying an international business
Follow these tips for buying an international business to make the process smoother:
- Look for synergies: If you want to buy an international business, look for a similar business to run alongside your current venture, as this can generate synergies that lead to efficiencies and cost-savings.
- Think about buying a distressed business: If you have the skills, experience expertise to turn a struggling business around, think about buying a distressed business abroad.
- Thoroughly review your target’s financial records: Use professional accounting services if required to make a thorough review of the business’s financial records, paying attention to debts, turnover, profit, and cashflow reliability.
- Meet the owners: Meet the sellers face-to-face and see the business in person, if possible, to build rapport and minimise the risk of buying a hopeless business.
Other tips for buying a business abroad include buying in a familiar industry, understanding cross-border deals, understanding local culture, and undertaking due diligence around strategic fit, taxes, corporate structure, assets, intellectual property, litigation, and contracts.
Tips for selling your business to an overseas buyer
Use the following tips for selling your business overseas:
- Understand overseas buyer motivations such as market expansion, diversification, and strategic assets: Anticipate their concerns and tailor your sales pitch accordingly.
- Comply with international laws and regulations: Research the buyer’s home country’s regulatory environment, understand UK international business sale regulations, and seek advice from local experts.
- Value your business for an international audience: Ensure your business is valued accurately.
- Secure foreign payments and other transactions with NewbridgeFX: Make and receive secure international payments and take advantage of competitive rates, fast and secure transactions, and dedicated expert support with a NewbridgeFX business account.
Other tips include managing communication and cultural barriers, considering post-sale involvement, conducting due diligence thoroughly, negotiating terms and drawing up the sale agreement, and finalising the sale with a secure international payment.
Seek expert guidance
As you can see, there are numerous challenges to buying or selling a business overseas. Seek expert guidance to ensure that the process runs smoothly and that you enjoy the best possible outcomes.
Open a NewbridgeFX business account
A NewbridgeFX business account can play a vital role when you sell or buy an international business. Leverage the advice of our experts and take advantage of our foreign exchange solutions to help take the hassle out of the process. Open a business account with us today.