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Written By Cindy Vanegas Published February 14, 2012 FOXBusiness

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A year and a half ago, David Greenberg decided to expand his in-home
tutoring business, Parliament Tutors, beyond its U.S. borders and into
London, Paris, Toronto, Montreal, Shanghai and Tel Aviv. The young
entrepreneur, who was looking to capitalize on international students'
desires to study in the U.S., embarked on the expansion full throttle.

"We felt like cowboys and were just trying to make things work and then
deal with any related issues," recalled Greenberg. But as the business
grew both domestically and internationally, Greenberg realized that
some added planning would have made the expansion more
successful.

"I wish that I had made a website for each country instead of one
website for our whole international operation. I believe I would have had
more success had I focused on fewer locations and spent more time
creating bilingual sites with content catered to the specific needs and
culture of each specific country."

International expansions often draw one of two extreme reactions from
small business owners: nearly impossible or incredibly easy. While
crossing borders to expand business is not the right decision for every
business owner, research and planning can help entrepreneurs
navigate foreign waters so they aren't faced with a big surprise well into
the process.

One of the most obvious advantages to entering a foreign market is a
new revenue stream. "When a small business owner expands
internationally, it becomes less dependent on the ebb and flow of one
particular country's economic cycle," said Shan Nair, an expert in
international expansion and owner of consultancy Nair & Co., "This
helps the business owner build up a profitable alternative revenue
stream."

Darron Burke, owner and president of Burke Brands, expanded his
coffee growing and roasting company into South Korea as a way to
protect his business. "We learned that international expansion can help
us hedge against inflation and a weak dollar here at home in the U.S.,"
he said.

But just as entrepreneurs can protect themselves against currency
fluctuations through an expansion, they also enter into a new banking
system that can create difficulties when moving money around.

"Banking in different countries can be a challenge," warned Edward
Trieber, CEO of human resources consulting firm Harris, Rothenberg
International. "You may not be able to merely pay by having a bank
account convert currencies for you as that may prove to be expensive."

Another major expense that is often overlooked is taxes. "U.S.
businesses are generally taxable on their worldwide income.
Consequently, if they also have to pay tax on their income in the foreign
country, they would have to pay tax there and here," advised Steven
Hagen, international tax attorney at Harper Meyer in Miami. "To avoid
that, the U.S. gives U.S. businesses operating abroad a reduction
against U.S. tax for the tax they pay abroad [the U.S. foreign tax credit].
However, there are many exceptions and hoops to jump through in
order to qualify."



Labor laws can also vary overseas. "It is absolutely critical that a small
business owner creates a country compliant employment agreement
that follows the guidelines and laws of the country governing the
employment in order not to be wrong footed if they end up in an
employment court being sued by a disgruntled employee," warned Nair.

Of course, banking, taxes and labor laws are often an afterthought to
the challenges of communication. "The language issue has been
interesting and a challenge. Our brands are based on slang, and
obviously slang in Mexico is different from slang in the U.S.," said Ted
Scofield, COO at Icebreaker Entertainment. Scofield and his wife are
expanding their consumer products company into Mexico and the
European Union this year.

Entrepreneurs will also need to consider if they are fit as owners for
such a major move. Burke, who moved his coffee business into South
Korea, warned: "You must have a lot of patience, understanding, a
strong will to succeed and a good exit strategy in case things don't go
as planned."

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