According to the Small Business Administration, about two-thirds of world's purchasing power is located outside of the United States. That's a lot of customers. Here are important points about reaching them:
- Building worldwide brand recognition is a daunting task, especially for smaller companies. First start in countries where your product or service is most well known and expand to other areas once those efforts prove successful.
- Consider the rank of your product or service against competitors. If another company is already firmly entrenched in a particular country, it can often be better for you to try uncharted territory.
- Target countries that have the best chance of raising your profit margins. This not only involves examining sales in a particular country, but the value of the nation's currency in contrast to your own.
Come up with a game planAs much as you may want to march into a new place and say "Here I am and here are my products," expanding overseas takes a considerable amount of planning. Like breaking into a new domestic market, you'll want to examine your company's readiness, identify appropriate international markets and figure out your sales strategy.
Export Portal, American Express and TradePort: have suggestions for doing business overseas and tips for setting up such a venture.
Think about the costsThere are tons of costs associated with entering new markets, and your balance sheet will only get more complicated as you go international. A few things to calculate are overseas shipping expenses, translating marketing products in other languages and establishing a local presence.
report about the costs of developing a foreign market and a how-to guide for breaking into the foreign trade game.
Form partnershipsSometimes the most successful way of attracting customers in a new market is to work with companies or organizations already established there.
Trade Information Center and the local American Chamber of Commerce in the country you plan to do business in may be good starting points for finding other American companies or regional outfits that want to team up.
- Know your customer. While it may seem obvious, it's important to keep to this basic principle in mind. International consumers may be as different from U.S. customers as they are similar. Know what your customers want, what their preferences are and how you will serve the niche.
- Figure out the rules before you play the game. Once you've gotten your own house in order, you'll want to make sure that you will be in compliance with U.S. export regulations. Go the U.S. Bureau of Industry and Security or Unz & Co., international trade compliance experts, for information.
- Be patient if you want to be profitable. As you're building your international operations, you may notice initially that you're putting more money in than getting back. Set realistic timelines for seeing a return on your investment and booking profits. Also, international banks provide financing options and services that may help reduce risks.