Top 7 Tips For Small Businesses Interested In International Trade

By on July 9, 2018

It is often believed that small businesses are the backbone of the economy, unfortunately, those that only do business domestically may not be reaching their full potential. The Small Business Administration (SBA) has observed that almost 96 percent of the consumers of the world live outside U.S. borders. With that potential proliferation in buyers, maybe now is the time to consider expanding your business to overseas markets.

As technology continues to advance, it is becoming easier and easier to feel connected to the most distant corners of the planet. Taking the steps towards becoming an international business are much simpler than they once were. Before deciding to set out on this new journey, here are a few tips to take into consideration.

1: Establish Goals

Deciding to take your business overseas is a huge step, but if it is something you are seriously considering, it is important to start establishing goals early on. Ask yourself some of these questions: Why do you want to take your business to another country? What do you hope to accomplish by expanding into a new market? Will you sell online, open a brick-and-mortar store or outsource production? What sort of risks are you willing to take, and are you prepared to handle it if they do not pay off?

Having goals that you are familiar with early on will be incredibly beneficial in helping you make decisions and guide you through the proceedings.

2: Start Small

Getting in over your head is never a pleasant experience and can be even more detrimental in your first international business endeavor. The global market can seem challenging to navigate and it can be easy to feel overwhelmed, but you have to start somewhere. Having goals that inspire you to think big is wonderful, but it’s wise to start small.

Narrow down your potential market and do a small test run before making final decisions. Try starting with a single country to expand your business to first, especially if they already have a demand for your product or the capital to produce your product at a fair market value. For those looking to outsource production, consider the natural and labor resource each country offers and pick a few companies with the potential to fill your orders.

If you already engage in selling products or services online, it is a pretty simple process to make your website available to (certain) buyers overseas. This can be an easy first step into the realm of international trade, and can help you learn more about a potential market and anticipated interest in what you offer.

3: Get to Know The Country

Now that you have decided on a new market to bring your business to, it is a good idea to become as familiar as possible with the people, the business culture, politics, and anything else that might assist your interactions within the country. As obvious as it may sound, different countries can have deviations from what you normally expect when doing business.

Being prepared to accommodate these differences will certainly be to your benefit. For example, unless you are fluent in another language, it might be a good idea to start in a country whose native language is English. Although it is not a requirement to do business, language barriers can present more challenges than necessary, especially early on in a business expansion. But language is only part of the potential problems for expanding into an unfamiliar land.

There can be cultural, political, and even geographical differences within the country that might make business complicated. Familiarizing yourself ahead of time can help save you from headaches later on down the line.

4: Perform Your Due Diligence

Speaking of research, the people and places of a country are not the only thing to familiarize yourself with ahead of time. One of the most important parts of any business venture is performing your due diligence. It is crucial to make sure you are satisfying all legal requirements and regulations, both within your home country and the one(s) to which you are expanding.

Research

Do as much research as you can and be as prepared as possible. Again, being familiar with what is necessary and expected ahead of time can help ensure smoother business dealings in the future. Speak with other American business owners operating in the area; they may be able to enlighten you to unspoken business practices, expectations or even gestures which affect business dealings or operations.

Protect Your Intellectual Property

Companies outsourcing production to foreign markets are often at risk for violations of proprietorship rights and being outperformed by cheaper, kick-off products. It is important to speak with a trusted insurance broker, legal advisor and/or business consultant for help putting in place proper protections.

Get to Know Local Employment Culture and Laws

If you will directly employ locals in a foreign storefront or manufacturing plant you will need to be aware of working conditions, employment laws, remuneration practices and cultural influences which will affect how day to day business is conducted.

5: Communicate with Foreign Buyers or Partners Effectively

Another thing to keep in mind when embarking on this new business venture is the importance of communication. When much of your dealings are going on in a different area, potentially thousands of miles away, it can be harder to feel in control of your business. With that, having a solid foundation for communication with any partners will be imperative.

Technology has made it so that communication, even from distant corners of the earth, can feel easier than ever. Text messages, Instant Messaging, E-Mail, can all provide forms of instantaneous conversation. However, it might be suggested that these are not the only communication forums to be used. Phone calls, video chat, and even in person visits can be preferable for making business dealings more seamless.

6: Trust in Your Choices

When you take into account all of the challenges of foreign commerce, this next point should be pretty easy to understand: the importance of trust. Remember that even when you are not there, you and your business are being represented. Having trust in the fact that both are being represented well can be a relief.

Being able to trust any partners and individuals involved in your business is key. Not only can this guarantee peace of mind when you are far away from transactions taking place, but can also save you some hassle if things ever go awry. Most importantly, don’t forget to trust your instincts.

If a person or a supplier makes you uncomfortable or doesn’t seem to have the best interest of your business in mind, don’t be afraid to walk away. Being more selective with who you choose to do business with will be worth the peace of mind later on.

7: Seek Help From Financial Professionals and Business Consultants

Making a move of this degree is not something that anyone does alone. With any big business decision, seeking professional guidance is a must. Having a knowledgeable team of business consultants, legal advisors and financial experts will be much to your advantage.

There are plenty of resources at your disposal that can assist throughout the entire process. The Small Business Administration (SBA) has set out to help coach, guide, and provide resources to businesses interested in growing overseas. In addition, professional business consultants and investment brokers may be able help you build a holistic plan for entering the international marketplace. By making use of these resources and other tools, small business owners can stop being discouraged by the leap into international trade, and instead start reaping the benefits.

Take the next step - Let's talk!

Remember to speak with your financial, legal or tax professional for more information about the topics which interest you. Here are a few ways for you to share your ideas, learn more and interact with FinancialSafetyNet members, authors and expert advisors.
Have a question, but don't want to share it with everyone? Contact a financial advisor.
Want to contribute to the conversation publicly? Submit a comment.

Submit A Comment

About Kendrick Lee

Senior writer and business columnist for FSN - Successful businesses, large or small, will lend to successful owners, employees, local communities and markets for continued economic growth. Since there are so many risks, finances and procedures to consider when running a business, Kendrick is dedicated to sharing business tips, strategies and ideas in the public sphere. Find Kendrick on !

You must be logged in to post a comment Login

Leave a Reply