Tips on How to Prepare Your Construction Business for the International Market

Tips on How to Prepare Your Construction Business for the International Market

February 20, 2020

In the world of business, one of the most significant steps that an organization can do is to start talks of globalization and enter the international market. While many would try to dissuade construction business owners from global expansion citing that the risks involved are far too high, the resulting payoff is equally as rewarding.

Establishing and maintaining a construction business entity in a different country involves an incredibly tricky task. However, growth is a natural phenomenon that when left unresolved, could translate to stagnancy and regression. According to Wells Fargo, 87% of all US firms believe that international expansion is necessary. It is only typical for a business owner to look for better opportunities abroad and try their luck at global domination.

The process of entering the international market is a complicated business activity, and it would be best to discuss them one by one to avoid confusion, and for better comprehension.

First, it’s ideal to list down the benefits of entering the international construction market and whether it’s worth it.

Benefits of Going Global

Increased Revenues

Having access to a broader customer base opens the opportunity for a construction company to achieve unprecedented numbers. With the right combination of marketing strategy, location, and business model, a construction business can multiply its revenue tenfold.

Second Life

A struggling construction business taking a giant leap of faith and moving their operations to a different country can find this decision to be their saving grace. Sometimes, a change of environment, pace, and culture can pump life back to the company. At the same time, the well going dry is a natural occurrence in any business.

In an economic model, one common event to happen is that by providing a steady supply of a specific product, the demand gradually decreases until it reaches almost zero. It is this exact reason why construction businesses continuously look for other opportunities outside their local area.

benefits of entering the international market

Improve the Company’s Reputation

Going global will do wonders for a local construction business. The existence of a thriving international branch indicates that the brand has already dominated the local industry and has taken on the challenge of surviving in a different environment, significantly improving its reputation. Clients and prospects alike will think more highly of the firm once it gets branded as an international company. With its cards played right, it will get to bid on and secure more construction projects and attract new clients.

Lower Overhead Costs

It has become a standard business practice for large corporations to relocate their business to developing countries to reduce their overhead costs like rent, labor, and cost of materials.

Personal Growth

The act of establishing a successful international business venture can significantly contribute to the personal growth of the owner of a construction business. They will be exposed to a great number of cultures while also being taught some essential life lessons such as patience, grace under pressure, and maturity. All these are essential in the construction industry, where delays in project completion and payments, as well as cost changes, are common.

Tips on How to Prepare Your Construction Business for the International Market

Now that the benefits have been established, it is now prudent to go to the “How” phase. Preparing your construction company for the international market is not as simple as you may think. There are hundreds of documents to make, employees to train, and resources to spend. Below are some of the tips construction business owners planning to expand can follow to ensure a smoother transition.

Build a Successful Business Model

challenges of entering the international market

The international market is not a safe place for startups for many reasons. Only businesses that have reached a certain level of maturity can survive the first year of being in the international market, and even then, the majority of these ventures fall apart. Before even entertaining the thought of opening up a business abroad, it is crucial that a stable headquarters and office culture first be established in a local setting.

A construction business model that can’t survive locally will fare worse in an international setting where the culture, market, and even the employees are different.

Do a Local Business Analysis and Audit

It is only logical to execute a local business audit and internal analysis before making any steps towards going global. Some questions that need to be answered are:

  • How ready is the business for such a risky venture?
  • Can the business survive should the endeavor fail?
  • Are there people you can entrust with to run the local branch?
  • Do you have enough resources to pursue an international venture?
  • Will the business be able to attract investors?

Find a Suitable Country for Your Company

Don’t just spin the globe and randomly decide on a country to set up shop in. Perform thorough market analysis on which nation can best support a new construction company. However, before making the final decision as to which location is best to start a company in, first, ask yourself these questions:

  • Are you comfortable living in the country?
  • Do you have to go back and forth from your home country to the new country or can you afford to stay for an extended time?
  • Will you be all right being in a country with a different culture than yours?
  • Your lifestyle will drastically change should you choose to set up shop in another location. Are you okay with that?

For example, if you decide to establish a wholly foreign-owned enterprise in China, it is better to immerse yourself for a week or two before making a big decision. Choosing a neighboring country may be more appropriate if you are not yet as accustomed to different cultures and lifestyles.

Develop an International Strategy and Business Plan

The business model that worked so well for the present company may not work exactly as it did with the new venture — going international means thriving in a different culture, economic market, and even government rules and regulations. A business must prepare a global strategy and business plan. A few backup plans will also not hurt if the first strategy does not work out.

Conduct extensive and thorough market research that will answer these questions:

  • Who exactly is your target market?
  • What does your target market need?
  • Can you supply such services and products?
  • Is there any existing competition?
  • What is the financial propensity of your market?
  • What are they doing and more importantly, what should you do differently to gain an edge?
  • Are there any cultural and legal sensitivities that you should be aware of?

Iron Out the Rules and Regulations

The company will be put in a precarious position, both local and international if it sets up shop in a new country without being knowledgeable of the country’s laws involving businesses, particularly in its construction industry. While most countries encourage free trade and support the establishment of international companies, there are still some rules that must be followed. The punishment for non-compliance can range from sanctions, penalties, deportation, and even jail time.

Hire a local lawyer to sort out all the legalities of your construction business to ensure strict compliance. It is not recommended to skirt any rules in favor of extra savings or less hassle. After all, the reputation of the brand is on the line. It would be difficult to pick back up once the company gets involved in an international dispute. Any client or investor will be wary of doing business with an entity with a negative reputation.

Similarly, before entering into binding agreements with contractors, it is recommended that the company be recognized first as a professional entity to guarantee that all business proceedings are legal.


It’s worth pursuing an international construction business venture. Many benefits come with expanding your business abroad. However, there are certain legalities and sensitivities that you must be aware of. Through a combination of perseverance, tenacity, and some luck, hundreds of organizations have grown to become multi-billion dollar corporations. There’s no one saying that this cannot be you in the future.

This is a guest post from Marvin Magusara of New Horizons Global Partners.

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