Our panel of young entrepreneurs offers advice on how to make the most of international business opportunities.
Q. I have always worked with customers strictly in the United States, but recently my business has been getting attention from potential clients in other countries. What should I keep in mind while I'm transitioning into international business?
- Tara White, Kentucky
The following answers are provided by the Young Entrepreneur Council. Founded by Scott Gerber, the Y.E.C. is a nonprofit organization that provides young entrepreneurs with access to tools, mentorship, community, and educational resources that support each stage of their business's development and growth. The organization promotes entrepreneurship as a solution to youth unemployment and underemployment.
Pay attention to local customs and traditions.
"Businesses can't exist outside of the culture and society of their native countries. Issues such as customer service and communication styles vary wildly across cultures and borders. Be sure you understand and manage the cultural implications of doing business abroad before closing any deals."
Learn a few phrases in your client's language.
"Familiarizing yourself with a few words and phrases in the client's native language or lexicon can go a very long way. People throughout the world appreciate when somebody abroad exhibits an interest in their language and culture. By simply offering a few words, you not only show your interest, but also minimize the distance between you and the client."
Don't overlook taxes and legal issues!
"Do your due diligence on legalities and taxes for each country. Do you need to incorporate in each country? What are the tax rates, and would you need to file a tax return in each country? What are the customs requirements? Remember that a even a basic legality, or custom duty, or tax on your product import can make or break the business."
Learn to master global etiquette.
"Western societal norms don't always fly with the rest of the world. Be sensitive and proactively overcome cultural barriers that exist in various markets. I am a huge fan of the "Country Insights" online resource provided by Foreign Affairs and International Trade Canada. It is an excellent go-to guide for country facts, cultural information and do's and don'ts by country."
Pay attention to the details.
"It can be the practical little things which trip a business up when going global; details like time zones, national holidays and celebrations, or the meaning and association of colors and icons. These are the small details which can make or break the way your business connects with local clients so it's worth doing your research or even better, working with someone locally."
Be careful about contracts and payments.
"One of the biggest challenges with doing business internationally, is the enforcement of contracts and payment terms. Going to court in another country, or chasing a debtor who is way overdue and lives 6 time zones away can be a real challenge. Depending on the nature of your business, you should seek large upfront deposits or even full prepayment for first-time customers."
Understand the time required to go global.
"Going global is definitely a great way to expand your business, but just understand first that it may take significant time away from your current daily activities. Everything from local laws, to local customs, to local reputation, etc. will have to be researched and executed. So dive in! But just make sure beforehand that you've got the resources to cover you while you make it happen!"
Going Global? Get Local!
"That international clients discovered your company and your products indicates you have done something right-don't change it! Deliver products and services to them in the way that makes doing business with you feel easier than doing business locally. Translate key product attributes, make price conversions to local currencies easy, and be available during their business hours. "
Research your competition.
"Do your due diligence and locate similar companies that exist in your potential clients' countries? Why aren't the clients going to them? What are they doing wrong? What are they doing right? Record your findings, proceed with caution, and capitalize on expanding your business to these new areas."
Make trust and reliability your priorities.
"We'd like to believe that both the people and practices are the same or similar in different parts of the world, but this is rarely the case. Seek people, companies, services that are honest and transparent. Never become too comfortable, but trust and reliability in unfamiliar territories should be more important than other typical metrics that focus on ROI and growth."
Seek international intellectual property protection.
"You will need to strategically seek international intellectual property protection. In doing so, your first step will be to make smart, realistic choices of where your best targets are before spending money to make sure not only that your product can be sold in those markets, but your brand will not violate any trademark laws in those countries."
Transplant, translate -- and then innovate.
"First, transplant your existing offering into the market given the current international client demand. After an initial period of analyzing market feedback, translate your product and services to meet the local needs of the international market. Over the mid-to long-term dedicate resources on-the-ground to foster local innovation targeted specifically for your consumer market segment."
Do you need a worker's permit? Research!
"Visiting another country for business is different than visiting another country for spring break. Do your research beforehand and make sure that you have all of the paperwork you need to get into the country without a hassle. Many countries require worker's permits for specific businesses. It's worth it to get all of your paperwork done now so you aren't held up in immigration later."
Link in locally.
"Seek out alliances with other business owners or executives in the countries you're looking to market too. It helps to have trusted allies who live locally and speak the language and understand the cultural nuances. LinkedIn in is a great place to start including networking with the members of International Business Groups and seeking out others in your industry by country and specialty."
Work on your communications.
"I've continuously worked with international clients since I started my business without problems. I did rewrite many of my business materials (especially those that guide new clients through how I can help them) into simpler language, focused on being easy to understand even for readers for whom English isn't their first language. Put a little extra oomph into your communications."
Hire locals who understand the culture.
"Thanks to platforms like Elance and oDesk you can locate people who live where your potential clients live. It is invaluable to have locals who can translate and help you navigate the uncharted waters of doing business in a foreign country."
Use technology to control your international biz-dev costs.
"In some cultures, it's common to expect business to be done face-to-face. To contain your financial and time investment in new business development, set the expectation with international clients that you will conduct most business virtually with trips only for very special circumstances. My company has been able to build an international clientele using just email and Skype. "
Understand the impact of a weak dollar.
"If you break into a market with a currency that is much stronger than the US dollar, then be examine the costs associated to expanding internationally--especially if you need a local team for sales/operations. Paying salaries in Euros can be a real killer, and there are a lot of fees associated with paying employees internationally."
5 things to keep in mind when doing international business.
"1. Time Zones. You'll need to be doing business when they are doing business. 2. Tariffs. Make sure you know what taxes and tariffs you will be having to pay. 3. Customs. Allow time for approval of your goods through customs. 4. Shipping. What are the international shipping costs? How long will it take to arrive at its destination. 5. Be considerate of accents and broken English."
Tread carefully in overseas markets.
"You don't appreciate how good we have it here in the U.S. until you start trying to do business in other countries. Differences in laws, customs, currencies, quality control and languages all mean that whenever you think about going overseas, don't just double-check everything, triple-check it as it'll make you a better businessperson and it's great to challenge yourself!"
Ask whether you can provide a superior level of service.
"Will you be able to satisfy overseas customers with the same level of quality and attention you give to United States customers? Make sure logistics are in place before accepting orders. Also consider, what differences in culture or norms should you be aware of so that your business is perceived positively overseas?"