What Gets Stopped at the Border
Businesses rarely struggle abroad because the new market was hostile. More often they struggle because of what they assumed they could bring with them.
Ryan Babbage6 min readEssay 05 of 08When a business decides to expand into another country, most of the planning goes into the destination. What is the market like? Who are the competitors? What are the rules? Where should we be based?
Those questions matter. But I think the more revealing question points the other way. What are we bringing with us, and how much of it will actually make the journey?
Every successful business accumulates advantages at home that it no longer notices. A reputation that opens doors. Relationships that shorten every negotiation. Informal arrangements that everyone understands. A founder who can solve most problems with a phone call. These advantages are real, and they are a large part of why the business succeeded.
Many of them do not travel. They are stopped at the border, quietly, and the business only discovers their absence when it reaches for them in the new market and finds nothing there.
The luggage of success
I find it useful to think of international expansion as packing for a long journey. Some things travel well. Some need to be repacked in a different form. Some must be left behind and rebuilt on arrival.
The trouble is that the things most likely to be left behind are the ones the business relies on without thinking. Nobody lists them, because nobody has ever needed to. At home, they are simply the way things work.
Across six areas, here is what I look for.
1. Proof of what you own
At home, everyone may know that the business owns its technology, its brand and its methods. Abroad, knowing is not enough. A new partner, customer or regulator will want to see it, in documents that make sense to them, and they will want to know whether that ownership is protected in their market, not only in yours.
The question to ask is simple: if a partner in the new market asked for proof of ownership and protection this week, what could we show them? If the answer involves the words “everyone knows”, the asset is not yet ready to travel.
It helps to separate three things that are easy to blur at home. Owning something, holding a licence to use it, and being permitted to offer it in a particular country are different questions, with different answers and often different advisers.
2. The reason for choosing this market
Many first international markets are chosen for reasons that feel compelling at home: a contact who lives there, a conference that went well, a sense that “everyone is going there”. None of these is a reason the market will recognise.
A market chosen on evidence starts with the customer. Who in that market has the problem you solve? How do they buy? What rules, certifications or approvals stand between you and them? And how is business actually done there: how quickly, through which relationships, with what expectations of presence and commitment? The answers sometimes point to a different first market from the one you had in mind. It is far better to learn that before you arrive. It is also worth deciding, in advance, what evidence would make you choose a different market, or wait, before the commitment becomes hard to reverse.
3. A structure built for one country
Most businesses are structured for the country in which they began. That is entirely sensible, until they try to operate in a second one.
Where should the intellectual property sit? Which entity will sign contracts in the new market? Where will the people be employed, and where will profits be recognised? These are questions for qualified legal and tax advisers in each jurisdiction, and I would never suggest otherwise. But they are also strategic questions. They should be asked deliberately, early, and with the destination in mind, rather than answered by default because of how the business happened to be set up at home.
4. Someone on the ground
At home, your relationships do much of the work. Abroad, you are a stranger, however distinguished your record.
The fastest way to stop being a stranger is to find people in the new market who would genuinely benefit from your success there: partners, distributors, customers or institutions whose own priorities you advance. The route to the customer may be direct, through a distributor, through a joint venture or through a licensee. Each carries different rewards and different risks. What matters most is that the relationship rests on shared interest, not only on goodwill. Even a warm relationship needs clear expectations: what each side contributes, how performance will be judged and what happens if it falls short.
A helpful test: who in the target market would gain most if we succeeded, and do they know who we are?
5. How the asset will earn money there
A business model that works at home is not automatically the right model abroad. In a new market, an asset or a body of IP might earn more by being licensed than by being sold directly, or by being developed with a partner rather than alone. In another, the opposite may be true.
There are, broadly, four choices: sell, license, partner or build. Each implies a different level of control, investment, risk and return. The right answer depends on the market, the asset and what the owners want to keep. It is worth deciding consciously, and worth knowing in advance what would change the answer. Terms that are generous enough to attract a partner should also be protective enough to keep the asset valuable if the partnership does not work.
6. The founder’s calendar
The last item is the one most often forgotten. Expansion takes leadership attention, and leadership attention is finite.
Who will lead the new market? If the honest answer is the founder, two further questions follow. What happens at home while they are away? And is the expansion funded for the time it will really take, rather than the time everyone hopes it will take? A business that can only grow abroad by weakening at home has not expanded. It has simply moved its risk abroad.
Arrive in stages
The grand arrival is tempting: the launch event, the office, the announcement. A sequence of tests is usually wiser. Each stage asks for the next commitment, not the whole story, and is designed to answer one question before the next is asked.
For each stage, it helps to write down what it would prove and what it would not. A good first meeting may show that a problem exists. It does not show that anyone will pay to solve it. A pilot can show that the offer works locally. It is not an exemption from the approvals that would apply anyway, and it should be run on the same footing as the business you hope to build.
Expansion is a test of the home business
The deeper lesson, I think, is that going abroad is less a test of the new market than a test of the business itself. It reveals which of its strengths are institutional, and therefore portable, and which depend on one place, one network or one person.
That is not a reason to stay at home. It is a reason to prepare honestly. And a serious plan should allow for the answer “not this market” or “not yet”. Knowing what would make you stay home is part of knowing why you are going. The businesses that cross borders well are usually the ones that have already done the work of turning personal advantages into institutional ones: documented, structured, shared and ready to be carried.
Pack accordingly.
Check what will make the journey. The Offshore & Commercialisation Readiness diagnostic on ryanbabbage.com asks eighteen statements across six dimensions. It shows the priority issues to clarify first, then a profile of typical practice, with one practical next step before you cross a border. It is a self-review to organise your thinking, not legal, tax or regulatory clearance. If you are already weighing a specific market or asset, bring it to an Executive Decision Session.
Strategy facilitation only. Structuring, tax and legal questions should always be taken to qualified advisers in each jurisdiction.
This essay is general information and opinion, written to share how Ryan thinks. It is not personal financial, investment, legal or tax advice. Please take advice from appropriately licensed professionals before acting on any decision it touches.