Twenty Essential Factors to Consider Before Going Global
Content provided by the Women Presidents' Organization
By Laurel Delaney
Never in the history of the world has the entrepreneurial and small business spirit - the spirit of adventure -- been more alive or in a more favorable position to reach out to the world for business. International trade increases sales and profits, enhances a company's prestige, creates jobs and offers a valuable way to level seasonal fluctuations. But one thing gets tricky: what factors to consider before going global.
As with any powerful international business plan, the first step toward crossing borders is doing your homework. Consider these twenty essential factors before you begin.
Factor 1: Get company-wide commitment. Every employee should be a vital member of the international team, from the executive suite to customer service through engineering, purchasing, production, and shipping. You are all in it for the long haul.
Factor 2: Define your business plan for accessing global markets. An international business plan is important for defining your company's present status and internal goals and commitment, but it is also required if you plan to measure results.
Factor 3: Determine how much you can afford to invest in your international expansion efforts. Will it be based on ten percent of your domestic business profits or on a pay-as-you-can-afford process?
Factor 4: Plan at least a two-year lead-time for world market penetration. It takes time and patience to build a great, enduring global enterprise.
Factor 5: Build a web site and implement your international plan sensibly. Many companies offer affordable packages for building a Web site but you must decide in what language you will communicate. English is unarguably the most important language in the world but only 28% of the European population can read it. The percentage is even lower in South America and Asia. Over time, slowly build a web site that communicates sensibly and effectively with the world.
Factor 6: Pick a product or service to take overseas. You can't be all things to all people. Decide on something. Then stick with it.
Factor 7: Conduct market research to identify your prime target markets. You want to find out where in the world your product will be in greatest demand. Market research is a powerful tool for exploring and identifying the fastest-growing, most penetrable market for your product.
Factor 8: Search out the data you need to predict how your product will sell in a specific geographic location. Do you want to sell a couple of units to a customer in Australia or ten 40-foot containers on a monthly basis? Doing your homework will enable you find out how much you will be able to sell over a specific period of time.
Factor 9: Prepare your product for export. You should expect to adapt your product to some degree for sale outside domestic markets before you make your first sale. Packaging plays a vital role in enabling international connections. Make yours the best in its class, and you'll be able to sell it anywhere in the world.
Factor 10: Find cross-border customers. There is no overseas business unless you have customers.
Factor 11: Establish a direct or indirect method of export. It all boils down to export strategy and how much control you wish to exercise over your ventures. On the other hand, readiness to seize an opportunity is more important than having your whole strategy nailed down beforehand.
Factor 12: Hire a good lawyer, a savvy banker, a knowledgeable accountant and seasoned transport specialist, each of whom specializes in international transactions. You may feel that you can't afford these professional services, but you can't afford to do without them.
Factor 13: Prepare pricing and determine landed costs. Be ready to test out your price on your customer. See what reaction you get and then negotiate from there.
Factor 14: Set up terms, conditions and other financing options. Agree on terms of payment in advance, and never, ever sell on open account to a brand new customer. No ifs, ands, or buts. Just don't.
Factor 15: Brush up on documentation and export licensing procedures. If you find it too time-consuming, hire a freight forwarder who can fill you in on the spot. Ask a lot of questions. Use their expertise to your advantage.
Factor 16: Implement an extraordinary after-sales service plan. The relationship between you and your overseas customer shouldn't end when a sales is made. If anything, it begins on the sale and requires more attention. The "care and feeding" of customers determines if they will keep coming back.
Factor 17: Make personal contact with your new targets, armed with culture-specific information and courtesies, professionalism and consistency. Your goal should be to enter a different culture -- adapt to it -- and make it your own.
Factor 18: Investigate international business travel tips. The practical aspects of international business can make or break the success of your trip. In preparing to go boldly where you have never gone before, plan accordingly.
Factor 19: Explore cross-border alliances and partnerships. In charting your global strategy, consider joining forces with another company of similar size and market presence that is located in a foreign country where you are already doing business, or would like to. Gauge your readiness -- or willingness -- to take on a 50/50 partnership and what it can and cannot do for you.
Factor 20: Enjoy the journey. Never forget that you are the most important and valuable business asset you have, and that the human touch is only the more precious in our age of advanced technology. Take the best possible care of yourself, your employees, your suppliers, and your customers, and your future will be bright, prosperous and happy.
Going global doesn't have to be a scary proposition. By considering these twenty essential factors before going global, your organization can realize the full potential of globalization and capture dramatic revenue growth.
Copyright ©2006 Laurel J. Delaney. All rights reserved.
Laurel Delaney runs GlobeTrade.com and LaurelDelaney.com, both Chicago-based firms that specialize in international entrepreneurship. She is also the creator of "Borderbuster," an e-newsletter and The Global Small Business Blog, which are both highly regarded for coverage on global small business. Laurel can be reached at firstname.lastname@example.org.
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