Many businesses are eyeing the opportunities to expand their construction operations into emerging international markets. Here are three tips to get you started.
‘The global construction market is predicted to grow by 70% in the next 15 years.’ Government Construction Summit 2013
The end of the economic downturn is expected to lead to a new boom in construction projects worldwide. Many businesses are gearing up to take advantage of this boom by extending their operations globally. Here are three steps to maintaining a pipeline internationally.
1. Local workforce in place
Maintaining a pipeline relies on boots on the ground, no matter how you choose to operate (hands-on or management only).
- Set up a local partnership.
- Set up a local office.
- Buy an existing business in the target market.
You need people in all of your target markets – and local residents are always best placed to help you navigate local cultural differences.
‘A company with a local presence in a country can quickly find and hire local workers who know the ins and outs of doing business there. Some companies go a step further by investing in the local economies in a way that will ensure a strong talent pool, subsidising schools and infrastructure.’ Companies Going Global Research Summary – HermanMiller Inc.
2. Tax and legalities sorted
Every sovereign territory has its own tax system and laws. It is your responsibility to ensure that they are both adhered to as you maintain a pipeline internationally. You also need to consider carefully the implications of currency exchange on profits. Often the best way to get to grips with these demands is to secure the services of local experts.
You should also look at implementing a system like Alternative Dispute Resolution (ADR) in advance so that disputes can be resolved amicably without relying on a local court for arbitration.
‘In the context of large international projects where there are several parties of different nationalities involved, ADR offers the immediate attraction of avoiding any difficulties of conflict of laws or jurisdictional problems which may arise. It also allows the parties to reach agreement as to how their disputes should be resolved which can take account of national and cultural differences.’ International ADR involving an Indian party – A. Singh, international legal expert.
3. Internal systems
Exporting your company’s way of working is often best achieved by using the same processes across the entire organisation. As well as documentation, you should be providing access to your management information system, helping you maintain a pipeline and give head office a complete overview of attainment and progress. Just remember:
- Your system must support multiple currencies.
- It must comply with local laws and regulations.
- It must give you a clear view of operations regardless of geographical location so you can maintain a pipeline through any project.
- Provide a common experience for a your staff, regardless of location.
Getting it all in place
- Define your international partners and workforce.
- Get your local obligations resolved.
- Extend your management information system globally.