So, you’re ready to turn your successful domestic business into a global concern. Do you know what you’re up against?
Many U.S. entrepreneurs don’t have a firm grasp of what it takes to successfully expand abroad. They don’t need to.
Suffice to say that exporting products and services abroad, even within the relatively cozy confines of North America, is an order of magnitude more complex than selling out of a few stores across the nearest state line or opening up an out-of-the-box Etsy or Amazon shop to offload a relatively modest selection of wares to buyers on the other side of the country.
That’s not to say you can’t find real success in the international markets of your choice — only that you must know what you’re up against, and do your homework, before getting started. Here’s what that looks like.
Thoroughly Research Your Target Markets
First things first: Know that America is not the rest of the world, and vice versa. A slam-dunk concept here in the U.S. might fall flat even in superficially similar parts of the developed world: Canada, Australia, the U.K. It’s on you to thoroughly research your target markets and make any aesthetic or culturally appropriate modifications to your products before deploying them abroad; otherwise, you may be in for an unpleasant surprise.
Understand How Import Duties and Quotas Work
Import duties and quotas provide some measure of protection for homegrown industries. They’re often used to safeguard strategically important industries facing unfair competition from abroad; steel executive Todd Leebow’s advocacy for fair trade policy toward imported steel underscores their game-changing potential.
Of course, when the shoe is on the other foot, import duties and quotas can hamstring international expansion plans. Think twice about selling into high-tariff markets.
Get to Know the Culture
Market research can help illuminate prospective customers’ motivations, but you’ll also need to understand your potential business partners before inking long-term deals that you can’t easily back out of. Pay particular attention to meeting etiquette, professional dress, social customs, and other matters that can easily make or break business relationships. If you plan to do business in Asia, for instance, you’ll want to read multiple primers on Asian business etiquette.
Know What’s Necessary to Protect Your IP
You’ll also need to take steps to safeguard your IP. Many countries require foreign companies to share IP with local partners as a condition of selling into the market; such restrictions famously kept Coca-Cola out of India for many years. If you’re uncomfortable with any given country’s regulatory framework, don’t be afraid to pass it over; the last thing you want is your company’s crown jewels in the wrong hands.
Find Local Distribution Partners
Hook up with local distribution partners capable of navigating the often byzantine world of border controls and getting your products to market quickly. If you plan to manufacture locally, avoid working with fly-by-night logistics and manufacturing partners more interested in skimming your investment than putting it to work.
If It Seems Too Good to Be True…
Last, but not least: If and when you encounter an international business deal that seems too good to be true, have the discipline to say “no thanks.” There are plenty of business-friendly countries out there, and the U.S. is a pretty big market besides.
- How Your Small Business can Enter the International Market
- How to Find and Use an Export Management Company
- Starting Your Own Home-Based International Trading Business
- Starting a Home-Based International Trading Business (Part 2)
- Top 10 Ways to Earn Money at Home