The rise of business technologies has broken down most barriers to entering the global marketplace for even the smallest of businesses. It’s never been easier, or more secure, to market and sell products to the most remote corners of the globe right from your home office. In fact, out of all U.S. exporters, roughly 70 percent have 20 or fewer employees, according to the U.S. Small Business Administration.1
Emerging overseas markets represent the largest opportunity for any business. The current U.S. population, which the Census Bureau’s population clock projects to be just over 311 million, is a puny portion of the worldwide population of nearly 7 billion. India alone has a population of 1.2 billion potential new customers. The real opportunity for growth lies outside U.S. borders.
But just because the logistics are easier, it doesn’t mean taking your business outside of the U.S. is a simple decision. Any small-business owner who wants to be successful in overseas markets must do her market and regulatory research and make a thorough plan.
There are many ways to export, from selling to a buyer who then sells your product to a foreign market, to shipping and fulfilling overseas orders yourself. Because there are so many options, it’s critical that you understand all of the implications of each before you begin.
Here are some basic questions to ask yourself about your business to help you decide if you’re ready to start exporting your product, technology, or franchise.
1. Is there a viable market for your business in a foreign country?
Consumption habits are fickle. When you’re dealing with a foreign market, it’s vital to understand your customers. Do thorough market research and a market test to determine your business’s viability in a foreign market.
There are firms you can hire and free resources and access to specialists through the Trade Information Center2 to help you determine if your business is export-ready.
It’s important to look at everything from the impact of currency exchange rates to cultural preferences and patterns. What are the packaging, recycling, and labeling requirements in that market? Are the barriers to entry into a foreign market too costly to make good business sense?
The U.S. has free trade agreements (FTAs), which protect and provide favorable environments for American businesses, with 17 countries, according to Export.gov.3 Everything from eliminated tariffs to intellectual-property protections have already been negotiated and approved by the U.S. government and the World Trade Organization (WTO). Those countries are good places to start identifying potential markets. More than 40 percent of U.S. exports were sold to FTA countries in 2010.3
2. Are you ready to make the commitment to international export?
Exporting to foreign markets requires a high level of commitment for success. Aside from language and regulatory barriers, there are simple logistical considerations, like time zones.
From dealing with new middlemen and partners to making sure your labels are spelled correctly and meet foreign standards, expanding into a foreign market requires a huge commitment. Are you prepared to dedicate yourself and your company’s resources to the endeavor?
3. What is your plan for distribution and promotion in foreign markets?
Freight forwarders, shipping regulations, labeling, tariffs: All of these issues need to be considered in your export plan. Do you fully understand international shipping, export documentation, and financing requirements?
Distribution can get tricky in emerging markets. You can’t just use a tracking number in developing nations. Often, business owners look for freight forwarders4 who handle the formalities of shipping in foreign countries. Do your research and determine which distribution path is right for your business.
Aside from getting the product to market, how will you promote your business in a foreign country? Will you employ a foreign advertising or promotional firm? How will you manage your company’s image and brand in an overseas market?
Everything from color to font choices can have a huge impact on the success of your export business. Consider partnering with an expert who is intimately familiar with your new foreign market.
All of these challenging questions will help you determine if your business is ready to export to foreign markets. Visit Export.gov5 to learn about U.S. licensing and regulations and to find expert advice and resources.
For more information, visit:
1. “Export Loan Programs”
2. “Export Basics”
3. “U.S. Free Trade Agreements”
4. “Finding a Local Freight Forwarder”