Understanding and Avoiding the Pitfalls of International Expansion

CFO Advisory Services | Robert O. Mayer | Oct 10, 2022

The past two years have seen tremendous change in how and where businesses and individuals function in ways that go beyond more than people working from home and shopping online. The war in Ukraine has removed Russia as an option for expansion for most businesses. Tension between the U.S. and China has many companies considering moving manufacturing and other operations out of China and into India and other parts of the world. Simplifying the supply chain has become a top priority for companies seeking to overcome ongoing challenges while keeping costs under control.

Through this period of change, the U.S. continues to be appealing as a stable, reliable market capable of driving new revenue. International tax laws have contributed to a more level playing field and more products are being made in the U.S., such as electronic vehicles and batteries.

For companies considering international expansion, there are tremendous growth opportunities. However, there are also serious challenges that can derail a successful move. For example:

  • Are you moving to a location that has the talent with the specialized skills your organization needs to set up and maintain operations?
  • Given the state of the supply chain, how do you cost-effectively move goods from one country to another?
  • With fluctuations from market to market, state to state, and country to country in terms of operational costs, tax incentives, and available talent, how do you know which location is right for your organization?
  • Do you have your books and financial statements in order to support a move to the U.S. or another country?

Successful International Expansion

Running a business is the U.S. is different than any country in the world. Expanding a business into the U.S. or any other country introduces complexities that must be addressed to avoid issues with tax compliance, labor shortages, and unexpectedly high operating costs.

A core area of focus for Prager Metis CFO Advisory Services is guiding organizations through the process of international expansion. More than tax and accounting professionals, we become trusted business advisors. Taxes and accounting are certainly part of the equation. Reliable and updated financial statements and reporting, on-time filings, and a deep understanding of international, domestic, and state tax codes and incentives are essential to success. However, there is so much more that the CFO Advisory Services team brings to the table.

We leverage our networks across the U.S., Latin America, Israel, Italy, and other parts of the world to help you determine which locations have available talent, favorable tax incentives, infrastructure, and strategically advantageous geography. These factors are not the same for every business, so we take the time to analyze and understand your business goals, operations, and customer preferences. We can also help you develop a viable business plan and use your data to inform your decision-making process. This will help you maximize and maintain cash flow and insulate your company against financial instability in global markets.

Fractional CFO Advisory Services

The fractional CFO model is ideal when a business is going through a period of growth and/or change, like expanding internationally. Our fractional CFO Advisory Services allow you to focus your investment on the expertise you need for as long as you need it instead of hiring a full-time CFO and/or accounting team. We can bring in Prager Metis colleagues with diverse experience who have seen and overcome just about any obstacle you can imagine. We can guide you through the process of budgeting and forecasting and help you implement financial systems, processes, and strategies. You can also leverage our relationships with auditors, banks, and investors to communicate your financial status, secure low-interest loans, and strengthen your financial position. When expanding to another country, having access to this expertise without being forced to hire full-time staff can be the difference between success and failure.

If your company is considering setting up operations in the U.S. or another country, the Prager Metis CFO Advisory Services team can help you avoid common pitfalls and maximize the benefits of international expansion. If you are considering international expansion or require additional information, please contact Robert Mayer, Co-Leader of Prager Metis CFO Advisory Services, at RMayer@pragermetis.com.

2022-10-10T12:10:08-04:00
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