Starting a new business can be daunting, but growing that business to expand overseas can seem impossible. Despite the allure of new and lucrative markets, the obstacles to successful international growth are many and varied, and even the most well-planned ventures can and do go wrong.

Entrepreneurs should not assume that they will only encounter barriers to entry – neither should they avoid pursuing opportunities overseas, but they should never underestimate the risks involved in internationalisation.

Below, Amer Hasan, CEO of minicabit, the UK’s leading online cab price comparison site, and former Global Head of Apps and Internet Partnerships at Vodafone, shares his views on how best to approach international expansion…if you should at all.

Know what you’re up against

Never enter a market without doing your homework first. Ask the important questions – does it have the right demographics? What are the potential cultural nuances in launching your product or service? Have you fully grasped the laws and regulations of your target market?

Familiarising yourself with your potential customers and suppliers whilst scoping out the competition means that you can avoid costly surprises and better tailor your product for maximum impact.

>See also: Launching a business in another country – How to approach international expansion

In the Far East, for instance, newcomers to the cab industry face tough competition from the likes of Uber. Consequently, when Brazilian cab provider Easy Taxi tried to infiltrate the already saturated Singapore cab market last year they were forced to withdraw their services from the region.

Easy Taxi is not an isolated example…I’ve seen other start-ups in my market raise tens of millions of pounds proclaiming international domination, only to rack up unsustainable losses and retreat not long after. Failure to secure cost-efficient models or carry out appropriate market research can really hurt!

Don’t underestimate the financial risks

As well as having enough capital to make the initial investment, a well thought-out financing structure is essential to funding your business’s expansion in the long-run. Building a company from the ground up in a new market entails a variety of complex expenses. Some – rent, insurance, regulation – are easy to anticipate. Others are more unpredictable, so preparation is key.

Foreign exchange is one of the biggest financial risks to consider, particularly in emerging markets, but also keep in mind the potentially volatile costs of unknown levels of staff turnover, as well as the unforeseen pace of salary growth in emerging markets.

Being aware of these costs is important, but be mindful too of the enticements that many countries offer to foreign companies looking to invest in their markets – from incentives on property and income tax to exemption from certain duties. In this regard, the UK Trade & Investment (UKTI) organization can be a useful resource.

Maintain your focus

Taking risks and being innovative are an important part of competing as a growing business, but it’s also crucial to remain focused. The temptation to run before you can walk can seriously damage your prospects or, at worst, lead to your downfall.

>Related: Moving to Dubai – facing new challenges

If and when you choose to grow your business is therefore a very personal decision, so don’t feel pressurised to follow the crowd – overseas expansion is not for everyone.

For one, rather than becoming a small player in a global market, minicabit is focusing on consolidating its leading position in the £9 billion domestic market, before pursuing ambitious overseas projects which have seen its rivals flounder.

Global expansion can take many forms – from physically locating employees in foreign countries, licensing, to exporting to new markets or forging international partnerships. While there is much to be gained through internationalisation, a natural by-product of that strategy is increased risk.

Regardless of the size or structure of your growing business, if you do choose to expand overseas a proactive, strategic approach is key to remaining a step ahead of your competitors.