Being a small business doesn’t mean you have to think small. Technology has opened the world to small businesses and for many expanding globally represents a huge opportunity.
Would it work for your business? Here are some reasons to consider going global and some steps to take if you decide you want to test the international waters.
Reasons to go global
- To increase sales and grow your business
Selling internationally can be a great way to boost your top line and drive growth for your business. When you sell in new markets, you’re opening up your business to a whole new group of customers who may not have been aware of your products or services before.
- To diversify your business and reduce risk
Diversifying your customer base by selling internationally can also help to insulate your business from economic fluctuations in any one particular market. If there’s a downturn in your home country, for example, selling in other countries can help offset any drop in sales.
- To get a foothold in new markets before your competition does
If you’re the first mover in a new market, you can establish your brand and build up a customer base before your competitors even enter the market. This can give you a significant advantage when they do eventually arrive.
- To benefit from favorable government policies
Some countries offer incentives for businesses that export, such as tax breaks or subsidies. These can make selling internationally more attractive from a financial perspective.
- To learn from other cultures and ways of doing business
Selling internationally gives you the opportunity to learn about other cultures and how business is done in other parts of the world. This can help you develop new ideas and approaches that you can apply in your own business.
- To build your brand and reputation
Selling internationally can help to raise the profile of your business and build your brand in new markets. This can be particularly valuable if you’re looking to enter other markets further down the line.
- To make your products or services more attractive to customers at home
If you’re able to sell your products or services in international markets, it can make them more attractive to customers in your home market. This can be a valuable marketing tool that can help increase sales.
- To find new suppliers and partners
Selling internationally can also help you build relationships with new suppliers and partners in other countries. This can give you access to new sources of products or services and potentially lower costs.
These are just some of the reasons why a business might choose to sell internationally. Of course, there are also risks involved in selling in foreign markets, so it’s important to weigh up the pros and cons before making a decision. But if you do decide to go ahead, there are a number of things you can do to increase your chances of success.
Do your homework
Canada, Mexico, Europe, and Japan are usually the most obvious choices for establishing a global business, but depending on your products and services, smaller, less competitive markets could be better choices.
Before you consider expanding your company, you should be well established and profitable in the U.S. Then, you’re ready to begin the planning and research phase and develop your business strategy as if starting from scratch.
Next, you need to make a realistic appraisal of your products and ask yourself:
- Will people want to buy what you’re selling?
- Will selling your products require an education process before consumers accept them?
- Are there cultural differences you need to be aware of that could impact your success? The president of Dacor, for instance, found that Bangladesh, like most Muslim nations, has an Israeli embargo clause. Any goods shipped to Bangladesh can’t use Israeli equipment, materials, suppliers or bidders, and the deal can’t be consummated without that stipulation.
If you plan to physically set up shop in a foreign country, look into attending trade shows and trade conferences in that country, too. The Missouri Department of Economic Development’s International Trade and Investment Office sponsors trade missions to other countries. You may be reimbursed for a portion of the costs associated with these events. You should also line up local legal and financial advisors in the country you plan to enter.
Other resources to help in your decision-making process include:
- Missouri International Trade Center
- The Department of Commerce
- Export.gov, for how to do business in a specific country
- The International Trade Administration’s National Export Initiative/NEXT, for more resources on expanding abroad.