Global growth can be a daunting exercise, but also rewarding. Regardless of how you plan to take your business overseas, through offshore manufacturing, exports or outsourcing, you need to have a sound business process.
A recent McKinsey study found that while global U.S. companies only account for less than 1 percent of all U.S. companies, they earned 25 percent of total U.S. gross profits. But although internationally-minded firms are bigger and more successful, too many organizations don’t set their sights beyond our own country – hampering their growth and overall potential.
Global operations offer organizations a slew of benefits, from establishing new markets for mature products and services and reducing dependence on an American customer base to boosting sales during slow periods in the U.S. and competing more effectively against foreign firms. Here’s the process for taking your business, products, and services overseas.
Gather intelligence one country at a time
Narrow your research efforts by starting with the most promising market. Does your product or service exist there already? If so, how is it doing? Who are your major competitors? Does the country in question have the infrastructure (i.e. availability of supplies, staff, physical accommodations, roads) to support your business? If you will be bringing a new product or service to this market, is it likely that it will sell well?
After analyzing your market’s demographics and attitudes and deciding to move forward, you should prepare to adequately educate a culturally-diverse customer base on the benefits of your offering. During your investigation, the Department of Commerce website as well as BuyUSA.gov, Export.gov, and Trade.gov should prove helpful.
Tailor your messages to the market
Each global market will require its own version of your company’s story. You can create this by learning as much as you can about the country’s customs and value system, and then pinpointing where your product or service addresses a need. Your customization process should include product names, logos, taglines, and marketing materials.
Get the right financing
Not every U.S. based institution has the resources to handle global expansion. Multiple sources recommended working with the Export-Import Bank of the United States instead. The Ex-Im Bank is an 80 year-old, independent U.S. government agency that has helped finance overseas sales of more than $300 billion. It guarantees capital loans for U.S. exporters and repayment of loans or makes loans to foreign purchasers of U.S. goods and services. It also offers U.S. exporters credit insurance to protect against nonpayment by foreign buyers. The bank will finance the export of all types of goods or services except for military-related products.
Buy those plane tickets
When entering an overseas market, you should expect to travel there in person a lot. Not only do you need to establish personal relationships on the ground, but you’ll also need to know what’s going on in this new arm of your organization. If you don’t speak the native language, connect with the U.S. Embassy to engage a local guide with connections in your industry that can show you around and open doors for you and your company.
Hire savvy salespeople and distributors
In a new market where your product or service did not exist before, you may have trouble finding people who understand it at the outset. What’s more important is that these individuals have substantial knowledge of the market. You can teach them about your offering while they are teaching you about the world your offering will live in.
Heed those regulations
Just as you got your head around all of the legal considerations that apply here in the U.S., you will have to contend with a whole new set in your new market. Work closely with a law firm that has experience in that market to create contracts that are as airtight as possible.