In today’s world, entrepreneurship and the spirit of adventure are thriving more than ever, making it an excellent time for businesses to expand globally. International trade can increase sales and profits, boost a company’s reputation, create jobs, and provide a way for business owners to balance seasonal fluctuations. However, one major challenge is figuring out what factors to consider before embarking on a global journey.
As with any new business venture, the first step in going global is to do your homework. Here are 20 critical factors that you should take into account before starting your international expansion:
Factor 1: Obtain company-wide commitment. Every employee should be a vital member of your international team, from top executives to customer service representatives, engineers, purchasing agents, production personnel, and shipping staff.
Factor 2: Define your business plan for entering global markets. A comprehensive international business plan is crucial for establishing your company’s current status and internal goals and commitments, as well as for evaluating your progress.
Factor 3: Determine how much you can afford to invest in your global expansion efforts. Will it be based on a percentage of your domestic business profits or on a pay-as-you-go basis?
Factor 4: Allow at least two years for penetrating world markets. Building a successful, long-lasting global enterprise requires time and patience, so plan accordingly.
Factor 5: Create a website and develop your international plan thoughtfully. Many companies offer cost-effective website packages, but you need to decide on the language(s) in which you will communicate. While English is the most widely spoken language in the world, only 28% of Europeans can read it. This percentage is even lower in South America and Asia, so gradually building a site that communicates effectively with the world is a good idea.
Factor 6: Choose a product or service to take overseas. You can’t please everyone, so focus on a particular offering and stick with it.
Factor 7: Conduct market research to identify your target markets. Determine where in the world your product or service will be in the highest demand. Market research is an excellent tool for exploring and discovering the fastest-growing and most accessible markets for your product.
Factor 8: Gather data to forecast your product’s sales in specific geographic locations. Will you be selling a few units to a customer in Australia, or ten 40-foot containers per month to retailers in France? Conducting research will enable you to determine how much you can sell in a given time frame.
Factor 9: Prepare your product for export. Before making your first sale outside your domestic market, you will need to adapt your product to some extent. Packaging plays a crucial role in enabling international connections, so make sure yours is top-notch and can be sold anywhere in the world.
Factor 10: Find cross-border customers. You won’t have any business abroad until you can find customers first.
Factor 11: Determine whether you will use direct or indirect export methods. Your export strategy is critical, as it determines how much control you will have over your new ventures. However, it’s also essential to be ready to jump at an opportunity as it arises, instead of having everything planned out in advance.
Factor 12: Hire a team of professionals, including a lawyer, a banker, an accountant, and a transport specialist, all with experience in international transactions. While you may feel that you can’t afford these services, the truth is that you can’t afford to go without them.
Factor 13: Decide on your pricing and determine your landed costs. Be prepared to test out your prices on potential customers and adjust as necessary.
Factor 14: Establish clear terms, conditions, and financing options. Always agree on payment terms in advance, and never sell on an open account to a new customer.
Factor 15: Educate yourself on documentation and export licensing procedures, or hire a freight forwarder who can assist you. Use their knowledge and expertise to your advantage.
Factor 16: Implement an outstanding after-sales service plan. Cultivate strong relationships with your overseas customers and provide excellent customer service to encourage repeat business.
Factor 17: Take the time to research** culture-specific information and customs before making personal contact with potential customers. Adapt to different cultures and make them your own.
Factor 18: Prepare for international business travel by considering practical aspects that could make or break your trip’s success.
Factor 19: Explore cross-border alliances and partnerships with companies of similar size and market presence. Consider taking on a 50/50 partnership to expand your business’s reach.
Factor 20: Lastly, remember to take care of yourself, your employees, suppliers, and customers. The human touch is just as important as advanced technology, and your future will be bright if you invest in your most valuable asset: yourself.
Expanding your business into the global market can be a rewarding endeavor. By taking these critical factors into account, you can set yourself up for success and enjoy the journey.
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