The international markets fuel the growth of many small and
home-based businesses. When starting your business, you should
not limit your potentials by ignoring international realities.
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Marketing to a geographic area outside of your hometown will
boost your market share and help you keep pace with your
competitors. Small businesses throughout the United States and
other countries have gained international exposure and increased
profits through exporting. In fact, the Small Business
Administration (SBA) reports that small businesses represent 96
percent of all exporters of goods.
The advent of the Internet has made the daunting task of
going global easier. Today’s home business owners are
successfully adding international components to their marketing
programs. Two principal strategies are commonly used:
establishing a relationship with a business or individual
overseas, and developing a Web presence that makes products and
services available worldwide.
There are no hard-and-fast rules as to which businesses
should export, and which should not. However, making the export
decision requires careful assessment of the advantages and
disadvantages of expanding into new markets. Here’s a
checklist to help you determine whether your business can make
it in the international markets or not:
1. Quality of your product.
To
ensure success abroad, your product should be special and of
high quality. It is tough to sell cheap merchandise abroad,
particularly if they can produce your kind of products cheaply.
2. Flexibility and change in
mindset.
Selling internationally means catering to
the needs and tastes of people whose cultures and tastes are
different than yours. You need to avoid stepping on the cultural
taboos and sensitivities of your new market. Evaluate the
differences carefully.
3. Language barriers.
To
effectively market your product, you need to be able to “speak
the same language” as your consumer. Thus, you need to have
the capabilities to translate brochures and product manuals into
foreign languages. You have to be exacting in providing
instructions and could be liable if you make errors in providing
operating data.
4. Product acceptability.
What
works in your domestic market may not work for other markets.
Sometimes, you may even need to revise your product to suit the
climate and setting of your new market. If you intend to sell
electronic products, for example, you need to make sure that
they are suitable for electrical current differentiations
abroad.
5. Product names.
Cultural sensitivity includes ensuring acceptable product names.
Check if your logo contains characters that may not be
considered acceptable (remember Nike's gaffe?). Some names may
have unfavorable meanings or connotations in other countries.
6. Level of commitment.
Clarify
your commitment to international trade and your reasons for
exporting. You also have to have immeasurable patience, since
preparations and clearances can take many months before you make
a single initial shipment.
7. Organizational structure.
Exporting
to be successful needs an organized set-up. You need to have
mechanisms to seek out buyers and importers for your products.
You also need to ensure multinational legal compliance
(labeling, packaging, product safety and liability laws, etc.). An
alternative would be to hire an export management company to
help you gain instant access to foreign market knowledge and
export know-how.
8. Additional costs.
Expect to pay for additional costs, particularly for product
modifications and extra production costs. You will also need
translation services for your sales personnel and translation of
your promotional materials. You can also face greatly expanded
telephone and other communication bills, plus travel costs for
visiting the countries in which you plan to market your
products.
9. Pricing.
An important
consideration is whether you can sell at a competitive price
abroad. Price differentials that are acceptable in the domestic
market may not hold true in other countries. Carefully consider
the foreign exchange market and its volatility. Given the
instability of your new market’s currency, your products may
be priced too high or too low.
10. Level of competition.
A more careful analysis of your market is needed to determine
who your competitors are. The number of exporters providing the
same product to the same market is a good indication of the
demand for your business.
Exporting may offer tremendous market potential for certain
small companies. However, be prepared to do additional research
and incur preparation expenses necessary for developing and
implementing an international business plan. An international
business plan is an essential tool to properly evaluate all the
factors that would affect your company's success.
About the
Author:
George Rodriguez is a
staff writer for Power Homebiz Guides.
