Mistakes Small Businesses Make When Expanding Internationally

Looking to expand your small business into a new market? Whether you’re exploring manufacturing options, outsourcing customer service, or simply looking to grow your business, it’s important you do your research before doing so. Cultural miscommunications, payment methods, and marketing activities are just some of the factors you will need to consider before you expand your business internationally.


Here are five of the most common mistakes that businesses make when they expand internationally, along with tips on how you can avoid these pitfalls:

1. Not Planning for National Holidays

No two countries have the exact same national holidays. Different religious, cultural, and seasonal traditions can impact everything from marketing, sales, and customer service to manufacturing. For example, before, during, and after major holidays such as the Chinese New Year and Brazilian Carnival, business operations can be drastically impacted. Companies in some countries may have skeleton crews in place during popular vacation months, and major sporting events such as the World Cup can impact multiple locations simultaneously.


You can avoid scheduling snafus in other countries by researching ahead of time. Contact business partners who are familiar with local holidays and events. They can provide you with some invaluable insight into work schedules and productivity before and after major festivals and events. Your company may need to accommodate time off during these periods, especially if you are employing international staff members.

2. Ignoring the Cost and Pain of Foreign Exchange (FX)

It’s important that businesses have a keen awareness of exchange rate statuses and trends before exchanging company funds. FX includes fees that can drastically reduce your profit margin. This could be exchange rate fees, added in to increase the broker’s fee, wire transfer fees you are required to pay to move money, and small-print costs like account fees and maintenance fees. Currency differences can also influence how you choose to set your prices.


Looking at historical exchange rates can give you an idea of how much money you stand to gain or lose during extreme scenarios. This can help you brace yourself for potential fund losses and fees as you convert money. Your business can also explore currency forward contracts, which help you lock in a particular conversion rate over a long period of time. Working with a payment provider can also help small businesses facilitate FX in the most transparent way possible.

3. Assuming Customers Will Pay Using the Same Payment Methods as Other Markets

Payment preferences can differ from country to country due to cultural and regulatory factors. This can mean that the ‘preferred’ payment method in a new market can be completely different from what businesses are used to. People’s individual preferences can be a factor in sales, if you don’t offer the right payment method(s), it could lead to customers choosing not to pay for your product or buying from a competitor that does offer their choice of payment method.


GoCardless and YouGov surveyed 19,000 businesses to learn about customer preferences when it comes to payment methods. Bank debit (known as Direct Debit in the UK) is the most common use of payment in the UK, France, Germany, and Australia, but bank transfers are preferred for business invoices.


Corporate cards are popular in the US and Canada. They are the preferred payment method for every single type of recurring payment.


Bank debit was the preferred payment method for between 53% and 65% of consumers in the UK. This is similar in Germany and France. Consumers in the US and Canada prefer to use credit cards, particularly digital subscriptions. This disparity shows how important it is for small businesses to research preferred payment methods before expanding internationally. Failing to do so could lead to your company missing out on customers and sales.

4. Failing to be Mindful of Different Business Cultures

Language, holidays, and payment preferences can all be different, which is also true for business etiquette. Avoiding communication mishaps while conducting business internationally should be a priority for small businesses looking to expand into a new market. One example of this would be cultural time-flex. You might plan on meeting a localized business associate at a specific time. However, when you arrive, you might find that this colleague hasn’t shown up yet, or you may discover that you’re late and everyone has already arrived. Depending on your location, timeliness may take on new meanings. You might be expected to arrive several minutes before an appointment begins, or you may need to plan for a meeting starting and ending late.


These differences can be very market-specific. In the UK, a business call can be expected to include plenty of small talk and go off on tangents rather than sticking to a strict Agenda. In Italy, however, it’s recommended you get to the point quickly and don’t be surprised if you’re reminded to speed up if you start to ramble. It’s important for you to become familiar with the different business attitudes in your new market to ensure you can be successful and don’t risk offending anyone. If you want to learn more about business etiquette around the world, you can find our guide here.

5. Relying Solely on ‘Tried and Tested’ Marketing Activities

Consistent branding is important but relying on the ‘tried and tested’ marketing strategies you use in your current market might not be the route to success with your expansion. Often companies forget that the way people in other countries like to be sold to, and the way they shop, can be very different. The culture in the country you’re looking to expand to can significantly affect the way people choose to buy products. For example, trust is huge in most Asian countries, and introducing your products through local partners and storefronts that consumers already trust can be an impactful strategy. Online marketplaces are huge in China, but in European countries like France and Italy, people prefer to buy online directly from the retailer. Understanding your target consumer and their buying habits will help make your marketing strategies more efficient. This also applies to how you reach your audience. Posting on Instagram or LinkedIn in a country that doesn’t use these apps is never going to work. Research what apps they use in the country where you’re expanding to learn more about how you can best reach your consumers.


Not only should you look to avoid making these common mistakes, but these areas should be a real focus for your expansion. Planning for national holidays, overcoming payment and FX issues, learning local business etiquette, and coming up with a targeted marketing strategy are the secrets to success for small businesses looking to expand internationally. Another way to increase your success in foreign markets is to buy an international toll-free number. This will make it easier for customers around the globe to connect with your customer service reps and specialists.