Remainers and Brexiteers – from Tony Blair to Nigel Farage – acknowledge that leaving the European Union means we’ll have to upgrade our relationships with other parts of the world. With expansion comes opportunity, but entrepreneurs aren’t buccaneers. When the best business owners enter new markets, they take calculated, not unnecessary, risks.
It is reasonable to assume that Commonwealth countries will become more important over the coming years. In April next year, the 52 nations will be in London for the Heads of Government Meeting. And endeavours like the successful and increasingly global Pitch@Palace programme show the mutual goodwill that exists across the Commonwealth. We can benefit from the rise of great powers like India, using our competitive advantages and building on the fact that the elites of these countries often choose to own houses and educate their children here.
Commonwealth jurisdictions are often based on English law, and their lawyers have frequently trained in the UK. However, the type of law practised is rarely a deciding factor in whether an entrepreneur decides to enter a new market. For example, some business owners might initially choose to set up an office in Anglophone Kenya rather than Francophone Senegal, but they obviously won’t restrict the size of the market if there is demand for their product or service.
We are often approached by entrepreneurs when they are looking to expand by acquisition. Good advice at this juncture is critical. Entrepreneurs need to be on top of how to set up and structure the company, as well as labour law, intellectual property, taxation, dealing with local partners, real estate, and scenario planning if things go wrong.
Mergers and acquisitions are often seen in a binary way, and transactions can be adversarial. But it’s best to try to try approach it with the spirit of acquiring the right partner and structuring things so your interests are aligned around a growth strategy.
Finding a local partner is often key to success. I’ve worked in a number of IP heavy joint ventures where the expansion involves licensing a brand overseas, and there are lots of considerations: Who has control over what? How do you measure the benchmarks of when you’re successful? What do you do if it fails?
By nature, entrepreneurs tend to hope for the best, but they also need to plan for the worst. There should be a strategy to cauterise your expansion in case it doesn’t work out. The brand is sacrosanct. Even if you have a water-tight legal claim, bringing that claim in a foreign court isn’t always the best option, so it’s important to be in the best position when the music stops, strategically speaking.
Businesses are refined by expanding into international markets. You can’t be lazy. You have to prioritise and stick to what’s important. And it’s often a creative legal process of building something new based on what the business needs. It tests the mettle of both lawyers and entrepreneurs, but the successful internationalised British businesses make it worth the effort.