Think global: Is your next business opportunity international?
Over the past few decades the world has grown smaller and we’ve learned that international trade is no longer the privilege of larger corporations. Many small and medium-sized businesses are getting into the act. If you want to take your company to the next level (don’t we all?), your next big opportunity might well be outside the United States.
Recently I attended a meeting hosted jointly by the Madison International Trade Association and the Madison Chamber of Commerce. They shared some interesting statistics:
- 95% of all consumers are outside the United States.
- 75% of the purchasing power is located in other countries.
- 7% of businesses exporting are small. Two-thirds of those have fewer than 20 employees.
The Madison area underperforms when it comes to exports, while other parts of the state have taken advantage of consumer growth in other countries. For some companies, this points to opportunity for the right products and services. Durable goods, services, health care, food, and leisure and travel are all in strong demand. Asia is where much of the growth is happening, but you shouldn’t ignore areas such as Canada, South America, and some parts of the Middle East.
So what about you? Have you ever had an interest in developing an international business? Having a worldwide consumer base can help insulate your business against economic turmoil. During the recession, companies with at least 30% of sales outside the U.S. actually grew. So what do you need to do to consider foreign trade?
Have a plan: While international trade can be profitable, it can also be complex. There are many things to understand about foreign taxes and government regulations. How will you research those facts? What’s your plan of entry and your strategy for bringing product to market?
Be targeted: Know which markets would be the best for your products or services and why. Starting in the country that has the greatest need is better than trying to serve all countries. Too many firms start with a region rather than a specific targeted test area.
Know the culture: Business is handled differently in other parts of the world. Several companies have failed in China — not because they didn’t have a viable product or receptive market but because they didn’t understand how business was conducted.
Get connected: Learning how to navigate political regulations, build connections with distributors, and conduct sales can be as simple as finding someone who has already established those connections. It can speed up the process and save you several international trips. Seek connections in the markets where you want to do business.
Growing globally is about doing the right things. The opportunities can be tremendous for your sales and profitability. Take the time to ask the questions and educate yourself. With the right preparation, you could become an international global business in a shorter time than you ever imagined.
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