The international market fuels the growth of many small and home-based businesses. When starting your business, you should not limit your potentials by ignoring international realities. You need to think how you can go global with your small business.
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.
Your website needs to support the languages in the market that you are targeting. In addition to your main English-version website, you need to have your website content translated in Spanish, Chinese or whatever language your target market speaks.
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.
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.
Recommended Books on How to Enter the International Market:
- Entry Strategies for International Markets
- Go Global: How to take your business to the world
- Go Global! Launching an International Career Here or Abroad
- Redefining Global Strategy: Crossing Borders in a World Where Differences Still Matter
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Category: Business Growth