In a global economy, your competition isn’t just the firm down the street and your market isn’t necessarily just your local customers. With technology reducing the cost of market entry, the lure of new customers, and the opportunity to diversify your business, you may be considering expanding beyond your borders.
Signs You’re Ready
Consistent growth here in the U.S. is a good sign that you may be ready to expand into foreign markets. You’ll need a strong foundation in your home market to support the effort of branching out, especially at first, so if you want to go global, focus on strengthening your position here first.
Another good indicator your business is ready to go abroad may be a lot of inquiries asking if you serve or ship to a specific country or region. Do a little research on these regions to give you an initial sense of the opportunity to help you decide if it’s worth looking at the option further.
Finally, if your team currently has the capabilities to support any international efforts and focus exclusively on growing them, then you may be ready to start looking beyond your borders.
The leap into the international market pool is filled with red tape, legal implications, cultural adaption and challenges reallocating resources at home and shoring up partners abroad. So take it slow and launch initially into a single region with limited capability. Test the waters and establish a system before committing yourself beyond your means. This will make further expansion easier and less taxing on your bottom line.
Choose An Exporting Method
There are several strategies for getting your goods into foreign markets, each with their own risks. Do your research, consult colleagues and plan with your lawyers and accountants to decide on the one that’s best for your business, cost structure and strategic goals.
In general, you can choose to export your goods directly or indirectly. Direct exporting takes time, a lot of it, and requires hands-on experience and local knowledge. Hiring a local representative can help you navigate local regulations and set up local buyers to sell your product for you. But be sure to take your time vetting the right local partner.
If you don’t have the resources or adequate local contacts, you could choose to export via intermediaries who handle the entire process, including market research and promotion. You could also choose to export via an existing U.S. buyer who purchases your goods here and exports them abroad.
Bring in Professionals
If it isn’t obvious by now, you’ll need to consult with an international lawyer to help you navigate your overseas expansion. Find one who specializes in your industry and/or region of expansion rather than seeking out the least expensive option. And make sure your accountant has the skills to manage overseas transactions and able to make the most out of volatile currency markets.
Expanding your small business overseas can be a great way to increase your revenue, lower costs and grow, and starting small, using the right exporting method for your business and the right professionals will help prepare your expansion for success.