The typical entrepreneur always has his or her eyes open, scrutinizing every situation for ideas and watching for subtle shifts in the market that might spell opportunity. But sometimes the greatest opportunities lie outside the normal scope of vision. So though it is vitally important for small business owners and management to be on the lookout for opportunities, it also pays to step back and view things in perspective.
For many private companies, that can mean determining exactly where the market and potential customers really are. There is literally an entire world of opportunity out there. The Small Business Administration notes that 96 percent of me world's customers live outside the United States, and two-thirds of the world's purchasing power resides in foreign countries.
Finding a way to reach those customers while still turning a profit is the real challenge. Before tackling new markets for products and services overseas, the company needs to make sure it is prepared for international commerce. Here are a few tips for understanding what's involved with conducting business abroad.
Make a Plan and Stick to It. Expanding a business overseas requires a solid business plan, just as it does in the U.S. In fact, with the uncertainty that often comes with doing business internationally, a business plan is even more critical. The plan should start with some basic questions--how important is this market, what are the goals and how committed is the company?
Putting the answers to these questions on paper is essential to clarify the potential payoff of the strategy. Other considerations include potential export pricing, narrowing the focus to the most promising markets and customers and tactics for entering a new market. In addition, businesses should estimate export costs and revenue, along with investigating legal requirements, transportation logistics, financing and the need for partnerships or foreign investors.
One resource is local Small Business Development Centers, which might offer training, programs and other resources.
Prepare for International Payments. Doing business overseas means being prepared to deal in foreign currencies. Once the domain of large corporations, even small businesses now have access to foreign currency transactions, which can bring real advantages when dealing with vendors and customers abroad. The company may, for example, be able to take advantage of favorable exchange rates by paying overseas vendors in foreign currency....