Take Your Business Abroad
You took the plunge and started up your own shop five years ago. Now you're thinking it's time to head across the pond for a slice of the international pie. "Many small companies export their widget or service as an afterthought rather than build it into their original business plan," says James Silvester, author of the new book 401 Questions Every Entrepreneur Should Ask. "The key is to look before you leap, or you can bury the company you worked so hard to start." Here are four pieces of advice that often get lost in translation when going overseas:
1. Check the currency. "The No. 1 mistake is not taking a serious look at the fluctuations in the international currency markets," says Silvester. "If the dollar is weak, as it is now, your products will price more reasonably. A strong dollar can make it prohibitively expensive. "
2. Do the research. "You can get all the data you need about a prospective market from the Department of Commerce's International Trade Association or your state's department of commerce-ask for the international trade desk," suggests Silvester. "They have secondary market research about overseas markets or will research a particular region or country for a small cost."
3. Know the mother tongue. "More and more companies abroad expect you to speak the language, to know the currency, and to be able to quote in the currency," says Silvester.
4. Import some expertise. "Before setting up an international department to orchestrate your business overseas, think about using an export management company," adds Silvester. They can handle all the details of getting your product into the hands of a reliable distributor-one of the biggest challenges facing a small business. Some of these companies specialize in particular markets and industries. The U.S. Trade Administration has a directory of export management companies with solid track records. Using one of these outfits will reduce your chances of getting burned.
Originally appeared as "Abroad Jump" in MBA Jungle, Feb./March 2007