Global expansion doesn’t need to be a far-off goal for startups — it’s often more achievable than they think. Doing so early can be a smart, strategic move that gives them a strong competitive advantage.
Expanding internationally can unlock new revenue streams, accelerate growth, and position a company as a serious player on the world stage. It’s a way to tap into new customer bases, increase brand visibility, and drive profitability far beyond what a domestic-only approach might offer.
Entering global markets early also allows startups to outpace competitors and establish a brand presence in key regions. Plus, it provides access to diverse international talent, bringing fresh perspectives that fuel innovation.
So it’s no surprise that 47% of businesses in the United States, 35% in Spain, and 39% in Poland say they’re considering expanding across borders.
Of course, entering a new market isn’t without its challenges, but by following these seven strategies, startups can mitigate risks and increase their chances for a successful global expansion.
Key takeaways:
- Modern technology and cloud-based operations have eliminated many traditional barriers to international expansion, making global growth accessible to startups regardless of size or funding level.
- Early international market entry provides an advantage that allows startups to establish a brand presence in key regions before competitors.
- A successful expansion requires thorough financial planning and market research to identify target countries with strong demand while ensuring the expansion won't jeopardize the core business.
Can Startups Really Expand Globally?
Many startups assume that worldwide expansion isn’t realistic until they have a certain number of employees or reach a specific funding level.
This is understandable since entering a new market used to require a lot of investment, legal and HR infrastructure, and actual boots on the ground; however, the landscape has changed.
Many logistical and financial barriers to expansion have been eliminated thanks to modern technology, cloud-based operations, cross-border payments, the rise of remote work, and the availability of Employer of Record (EOR) services. The fact is that today startups can expand into international markets easier than ever before.
EOR providers, in particular, have revolutionized how small companies hire and operate overseas. These services allow businesses to employ talent in other countries without setting up legal entities or navigating local labor laws.
As a result, even startups with limited resources can build an international presence quickly.
Why Startups Should Expand Globally
New Markets Can Drive More Revenue
Entering new markets opens up fresh customer bases and untapped demand, providing startups opportunities to generate additional revenue beyond their home market. It also enables them to reduce dependence on a single market, creating more stable, scalable growth.
Tap Into Global Talent
A sobering 75% of European employers report difficulty finding candidates with the right skills. Opening up hiring to the entire globe gives startups access to the best talent, regardless of where they live.
Increase Innovation and Work Coverage
Expanding globally enables startups to operate across time zones, ensuring round-the-clock productivity and faster customer response times. And by hiring internationally, startups bring together a diverse group of people with various perspectives, which drives innovation.
Increase Market Understanding and Reach
Expanding globally allows startups to deepen their market understanding by exposing them to different customer behaviors, preferences, and cultural insights. Plus, it extends a startup’s reach, enabling access to new customers, partnerships, and opportunities that wouldn’t be possible within a single market.
In fact, 51% of SMBs hire international employees specifically to help their companies serve new markets.
Accelerate Company Valuation
Global expansion demonstrates a startup’s scalability, market demand, and long-term growth potential, and it builds brand credibility, which can increase company valuation.
Investors are often drawn to companies that show traction in multiple regions, as it signals broader revenue opportunities and reduced market dependency.
7 Global Expansion Strategies for Startups
The following strategies are your big-picture guide to scaling your startup internationally.
1. Conduct a Financial Wellness Check
Before entering new markets, it’s important to analyze the overall financial health of the business to determine if it’s feasible to take on the additional costs of opening locations in different countries.
While the goal may be global expansion, it’s still critical not to consider international growth if it could pose a financial risk to the overall business.
Choosing the best global expansion strategy also depends on the startup’s business model. Some options include opening a new physical location, exporting, franchising, or forming strategic partnerships with existing businesses in the target market.
Next, startups need to create a budget for the cost of the planned expansion. This should include allocating funds for market research and legal fees, ensuring compliance with local laws and regulations, and hiring and managing an international workforce.
Establishing relationships early on with local partners can allow startups to tap into their expertise in the local market and help with risk mitigation.
If the numbers look good, it’s now time to analyze which countries have the most potential for a business expansion.
2. Determine Your Target Markets
Start by identifying which global markets seem like the best fit for your business. This should include determining the level of demand for the company’s goods or services in a target country. Once a potential country for expansion has been identified, it’s important to:
- Analyze competitors and identify market gaps and opportunities
- Understand local customer preferences, purchasing power, and buying behavior
- Consider cultural norms that may impact business operations and consumer behavior
Any market-entry strategy should begin with establishing relationships with local advisers, legal specialists, and industry peers. These local experts will be able to provide guidance and insights on best practices and potential pitfalls to be aware of before entering the new market.
Businesses may also consider investing in training for employees unfamiliar with the nuances of the new market’s culture.
3. Localize Product and Customer Experience
To succeed in global expansion, startups need to tailor their products, messaging, and support to fit the norms of each market they enter. When done well, localization can significantly boost customer trust and satisfaction, making your product feel native rather than foreign.
For example, when Spotify expanded outside its borders in its first two years, its founders noted that localization was a significant part of the product’s expansion strategy.
Begin by tailoring your user interface and content to the local language, but also consider cultural references and visual elements such as colors, icons, and imagery. Payment preferences and pricing strategies are also important to localize.
For example, people in countries like Greece, Slovakia, and Bulgaria prefer cash-on-delivery or over credit cards.
Customer support is another critical area for localization. Offering support in the local language and during regional business hours helps customers feel valued.
Similarly, adjusting onboarding flows, tutorials, and documentation to reflect regional norms and use cases can significantly improve user adoption.
4. Create a Customized Sales and Marketing Plan
While the customer base may be similar in many ways to those in the startup’s country of origin, there are often subtle differences that need to be taken into consideration.
Before expanding into an international market, creating a customer persona is essential to tailor marketing strategy efforts to the needs and preferences of the potential customers' local culture.
Market research is essential in international markets where the language and culture differ from those in the company’s home base.
For example, marketing techniques that work well in one country may not make sense in another or might even rub potential customers the wrong way due to cultural differences.
Understanding who their potential customers are first enables startups to tailor their messaging effectively.
The marketing campaigns should reflect the information you’ve gathered about your target audience and include strategies for attracting new customers, retaining current customers, and increasing sales.
Efficient logistics, supply chains, and remote collaboration tools are vital for managing international operations. Startups must ensure they have the technology and partners in place to support seamless communication, workflow, and service delivery across time zones.
5. Consider Operational Infrastructure
Startups must also build the operational infrastructure to support their expansion across borders.
One key component of this is technology. Startups should invest in cloud-based tools that enable remote collaboration and real-time data access. They should also consider project management platforms, CRM systems, and asynchronous communication tools like Slack to help their distributed teams stay aligned.
It’s also critical to ensure secure and reliable IT systems that comply with international data privacy regulations, such as GDPR.
The supply chain and logistics infrastructure are other important areas to consider. Startups with physical products may require warehouses, local distribution partners, or localized packaging and fulfillment strategies. Reliable customer support channels and localized billing systems are vital for service or SaaS businesses.
Additionally, a startup’s financial infrastructure must be ready for global expansion. Startups should be prepared to manage multi-currency transactions and international taxation.
6. Establish a Physical Presence
Startups planning on opening a brick-and-mortar location in a new country first need to set up a legal entity there, which can be costly — up to six figures in some countries — and challenging.
It can also be time-consuming, so once a decision to expand has been made, starting the process as soon as possible is important.
Other potential expenses to consider when estimating the expense of a new physical space include:
- Costs for an office, utilities, equipment, and infrastructure setup
- Technology and infrastructure investments, including technology upgrades, software licenses, and IT infrastructure
- Supply chain and logistics setup, which could include shipping, warehousing, and distribution network costs
- Travel and relocation expenses for any staff who will be moving to work at the new location
- Fees for any necessary legal consultations, permits, and licenses
7. Hire and Pay a Global Workforce
Recruiting, hiring, and compliantly paying local talent in a global workforce requires extensive knowledge of country-specific employment laws.
Even if a business is expanding only into one new country, there’s still a significant learning curve, as every country has its own employment laws regarding:
- Working hours
- Employment contracts
- Payroll taxes
- Sick pay
- Holidays
- Insurance
If you plan on hiring independent contractors, that can pose additional challenges, including running the risk of misclassification. For example, in Germany, businesses can only classify a worker as a contractor for 18 months. At that point, the company would need to end the contract or hire the employee full-time.
Companies that run afoul of employment laws can face stiff penalties and fines for violations, even if unintentional.
Expand Globally With an Experienced Partner at Your Side
Expanding into international markets is an exciting opportunity for startups but requires careful planning and strategic thinking.
One way to mitigate the risk of employee misclassification and ensure full compliance with all employment laws is to partner with an EOR.
An EOR like RemoFirst helps companies expand by acting as the legal employer for their staff in other countries. The EOR assumes the responsibility of hiring and managing employees, while the employer is in charge of the day-to-day management of employees.
This way, startups expanding in new countries can legally hire talent in other countries without the need to set up a legal entity or physical presence — or risk costly violations of local employment laws.
If you’re considering an international business expansion, schedule a demo to learn how RemoFirst can help.
