Expanding your small business internationally has many benefits. It can protect your company from the ups and downs of the domestic economy, boost your brand image and, of course, grow your sales.
To see if you're ready to go global, ask yourself the following questions.
- Is your existing business operationally and financially stable? Expanding internationally will require a lot of your time and attention. You don't want your current business to suffer as a result. Make sure your systems and operations can function smoothly without you and that you have adequate capital for expansion, or a source where you can obtain it.
- Do you already have international customers? Global expansion works best when it’s a natural progression. For instance, if you own an e-commerce website, do you already get a fair amount of orders from customers overseas? Have you fielded requests from international retailers about carrying your product line? These are good signs that the potential for global growth exists.
- Are there partner relationships you can leverage to expand globally? Expansion is easier if you can capitalize on a partner's existing connections, resources, and know-how. For instance, if your products are carried in U.S. locations of a global retail chain, expanding into their overseas stores is a logical first step for going global.
- What markets are easiest for you to enter? To increase your chances of global success, it's generally best to start with a market that’s similar to the United States. in terms of language, culture and business norms. For instance, it's easier for most U.S. entrepreneurs to start by doing business in Canada or the U.K. as opposed to Thailand. On the other hand, if you speak Thai and have many business connections in Thailand, that could be the best place to begin.
- Is there a demand for your product in these markets? Do thorough market research to see if your product has potential to sell in the markets you are considering. Investigate the competition, target market, business climate and distribution options just as you would when expanding in the United States.
- Will your brand need to change to adjust to the global market? You may need to revamp your product, logo design or taglines to appeal to international customers. (For example, fast food franchises typically add some local dishes to their restaurants overseas.) Does your product name or slogan translate into something confusing or offensive overseas? Do you need to change your product packaging or labeling to meet international regulations?
- Do you have the appropriate trademarks, licenses and copyrights? Before entering international markets, make sure that you’ve protected your intellectual property and aren't infringing on any overseas companies' IP.
- Is your website global-ready? To make non-domestic customers feel comfortable, you may want to create different versions of your business website for each country, with different languages and product prices in the appropriate currency.
- How will you get paid? Whether you’re selling B2B or B2C, shipping products overseas shouldn't require a leap of faith. Talk to your accountant and your business bank about the best way to structure payment terms, methods of accepting payment, and other steps to ensure that you get paid. Make sure you have the right business forms and contracts in place to protect yourself.
- What additional costs will you need to build into your pricing? Thoroughly investigate tariffs, shipping costs, and other additional expenses of transporting your product to the country or countries where you plan to expand. Can you build these costs into your pricing structure and still make a profit?
- Will you need to set up an overseas office? Depending on your industry, an overseas office may be needed to expand internationally. If so, assess whether existing employees can transfer overseas or if you'll need to hire from the native country. Even if you plan on managing your international operations from the United States, be prepared to travel frequently to meet with global partners.
- Where can you get help? There are plenty of resources to help you assess the pros and cons of overseas expansion and take the leap into global trade. The SBA’s Office of International Trade and U.S. Export Assistance Centers are good places to start.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.