Localization in our World: Finance for International Business Owners and Investors

Running an international business is daunting. Adding in the financial aspect of international business is another layer of complexity. That said, there are some basic things to think about when it comes to finance for international business. Whether you are starting a new business with an eye toward global expansion, are in the process of acquiring or merging with a business or are an investor looking to invest internationally, you need to consider these often overlooked details.

Let’s start with an example of a business, a start-up, selling goods or services to customers. At its most basic level, this could be a single-person enterprise, making artisanal widgets. When they start up, they are likely looking at ways to transact and sell their artisanal widgets locally, using a currency of their country of origin, this could even be cash/check-only. Cash and check are by far the most restrictive in terms of global reach because a customer would need to have access to cash or a checking account in your currency.

Eventually, the artisanal widget maker will likely get set up on a credit card system, like Square or Paypal, to make it easier for payments to come in. At this point, it’s all about creating more access and the focus will be on domestic customers. Now, let’s say there is an opportunity to go to a trade conference in Germany and you will bring artisanal widgets to sell. Many assume that payment processing for credit cards would automatically be global, but for many, you are limited to taking payments in the country where you set up your account. In this case, you will need to research where you can take payments from or process payments differently, for example sending an invoice to the customer so they can enter their card details over a secure web connection.

Outside of the payment areas, the artisanal widget maker may translate or localize the product instructions, marketing or their website for the country where they will be selling their products. In this case, it is essential to work with someone who is skilled at global websites to identify not only common issues like international support for other languages or common mistakes like naming your artisanal widget something offensive/funny in another language, but other details that might get overlooked like how the widget pricing is displayed in the country. A skilled and experienced localization provider, like LingPerfect Translations, will support the international finance of your business. Some businesses opt to offer their products online via marketplaces like Etsy or Amazon. Each of the marketplaces serves a limited number of geographies and has its own way of calculating pricing for international and while some offer translation or localization. You should definitely get some advice from an experienced agency who uses real, human translators, as this will help maintain your brand voice and consistency.

Moving along to the next level of international finance, we have an opportunity for our North American Artisanal Widget Maker to be acquired by a European Artisanal Widget Maker. From a financial perspective, the buyer will want to start thinking early on about details. With fluctuations in currency, does it make sense to make an offer in dollars or euros? What are the risks and what kinds of caveates do you want to put in place for currency fluctuations? After the sale happens, there is an international alignment that needs to occur that touches all aspects of the companies’ products, branding (digital, social, hard-copy, etc), and HR. Potential international considerations would be where banking is done. Does it make sense to have separate operations for the European and American Artisanal Widget Makers or is it best to consolidate in one bank account in one country? Do you set product pricing in USD or Euro? When displaying on the website, are the prices hard-coded or are they dynamic according to the country of the viewer? Other financial concerns would be where to store and ship Artisanal Widgets and how import/export and country taxes are calculated. The final area we will address is HR. As you merge and grow, you will need to decide on whether to align salary and benefits and how taxes affect your employees. Ultimately, when it comes to the cost of adding new employees and where to place them, you will need to consider these variances which are based on currency exchange, local cost of living, and differences in income tax structures. We will address additional areas of international finance in future blog posts including taking a look at careers and various currencies including cryptocurrencies and how they may affect your international business.

As you can see, there are a lot of considerations when it comes to expanding or acquiring a business internationally. At LingPerfect Translations, we advise many businesses as they go along this path. Feel free to reach out about your international business plans and we will help you create your roadmap to global success.