Expanding your business beyond the U.S.
Tuesday, 2 July 2019
As the world becomes more connected through technology, it has become increasingly easier for U.S.-based companies to conduct business internationally.
A recent study showed that almost 60 percent of U.S. business owners see international markets as growth opportunities and have plans to invest and expand beyond U.S. borders.
Why pursue international growth?
For business owners who want to increase profits, it's worth a look globally. Almost 96 percent of the world's consumers live outside the United States, and two-thirds of the world's purchasing power is in foreign countries, according to the U.S. Small Business Administration.
Expanding internationally can help business owners even out seasonal sales cycles, access more revenue and reduce their dependence on U.S. markets. For Tru-Nut, a powdered peanut butter company based in Atlanta, selling internationally offers an opportunity to diversify its customer base and hedge the risks associated with selling in U.S. grocery stores, which have strict inventory requirements, chargebacks and price reductions. “If I only sold to American grocery stores, I would probably be out of business right now," Tru-Nut founder Reid Edgar told Global Atlanta.
In addition to adding new sales, expanding internationally can also help small businesses find new suppliers and talented workers. For a business facing a shortage of qualified employees or dealing with high prices from U.S. suppliers, international opportunities can help preserve the bottom line.
What to consider to grow internationally
While expanding internationally offers positive opportunities, business owners must take deliberate steps to do it effectively. Here's what to take into account as you get started:
- Do your research. Yes, there are lots of growth opportunities globally, but not every product or service is a fit for every international market. Take time to study the markets you're considering. Learn about the language, culture and your competition. Find out if the infrastructure you'll need is available — that may include transportation, highways, distributors, internet service and delivery services.
- Forge positive international relationships. Focus on getting to know your international customers and local leaders in the areas where you want to conduct business. Approach new relationships respectfully, keeping in mind any social, cultural and economic differences. With an open mind and a generous approach to serving new markets, you can develop a positive reputation and gain new allies who may be able to help your business grow.
- Determine your distribution strategy. There are a number of ways to get your products to foreign customers. It can be as simple as an e-commerce website with delivery partnerships in international locations, or as complicated as opening a foreign subsidiary of your company. You can also develop relationships with international distributors or set up joint ventures with foreign companies in the markets you want to reach.
- Hire or appoint staff or contractors to manage international sales and operations. In the beginning, you or your existing employees may be able to manage your international sales or operations. But as your international business grows, you may need staff or contractors in those markets to keep things running smoothly. Before hiring foreign employees or contractors, consult a labor attorney to make sure you're complying with all the applicable laws.
- Set up financial processes to ensure that you'll get paid. Financial innovations make it easier than ever to get paid in a timely manner and convert foreign payments to appropriate currencies to maximize exchange rates. To make the most of your international expansion, you'll need a financial partner who can help you do things like provide financing, secure international money transfers, complete foreign currency transactions and offer other international banking services.
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