Did you know there are over 27.9 million small businesses in the country?
That’s right – the competition is higher than you’d expect. You’ve got direct competition from businesses that offer products similar to yours but you also have indirect competition too. People spend money on those other, unrelated businesses.
It’s time to expand and reach out to a wider audience.
Your next move might be to go international. But before you do that, understand that there are a lot of things you need to do for it to succeed.
Don’t come unprepared since you might end up in debt. It’s important to pay off your debt as early as you can before trying again. That will set your business back a lot, so make sure to know what you’re doing.
Are you ready to learn how to become one of the global businesses? Read on to find out:
1. Research Your International Markets
As said before, you need to make sure that you come prepared. The best way to go about it is to do your homework and research the international markets. Learn about your new customers and the possible products or services they’ll pay for.
You also need to learn about their buying habits and discover patterns. An easy way to gather data is to check your current existing customer base. It’s possible that there are already international buyers for your products.
That means you already have a starting point for market research. Get data from countries your international customers live. It’s easier since you already have a degree of success in that area.
It might be intimidating, but there are a lot of tools for you to use out there.
2. Handle the Legal Necessities
You need to get the proper documents to sell your products in countries you’re interested in. Start this only after you’re certain about the demand within these foreign locales. The most common document you need is a business license.
Depending on the country, you might need more documents to become legally compliant. This will result in more research since a small mistake might result in legal actions. You can check with the International Trade Administration’s resources for the possible legal considerations when entering foreign markets.
3. Develop a Fulfillment Strategy
Once you’re done with the legal matters, you need to formulate an order fulfillment plan. There are a lot of differences between domestic and international order fulfillment.
It’s possible that you can use suppliers within your prospective countries. This helps make your processes simpler.
If you get local suppliers, it’s going to help keep the shipping time. A lot of online shoppers see this as one of the main factors affecting their buying decision. You can research on big online suppliers and check how they conduct their businesses and set it as a model.
Another thing you need to consider is the shipping providers. Check for the companies that operate within the areas you choose to sell. Having knowledge about local providers helps determine the best setup benefiting both you and your customer base.
4. Set Your Competitive Prices
If you’re trying to grow globally, pricing is always a big consideration. After all, it’s important to earn an optimal amount of profit while staying competitive. What this means is that you need the knowledge to know the pricing of similar products to the countries you’re planning to sell.
Your main concern is to know the value of money in the countries you choose. As an example, it might be normal for people in the United States to spend more than $50 for online purchases. But there are third world countries out there where this same amount is a bigger portion of possible buyers’ income.
What this means is that your product might not be affordable. Your response to this is to strike a balance between profitability and competitiveness. Sometimes, it’s better to search for other markets since you might not turn up a profit in these regions.
5. Market Your Products for Local Audiences
Modern marketing is often more important than sales generation. It’s important to market your international sales. This ensures that it’s localized for your intended audiences.
There are instances where you sell in areas where people can’t speak English. Even if your website has a lot of details for your product pages, people won’t buy products from websites they couldn’t read.
What this means is that you need to give your foreign markets content they can read and understand. You need to apply this to your website and your international marketing strategies.
It’s possible to use over the phone interpreter services for customer support. Always remember that your customers will support you more if you show that you care for them. The best way to show this is to tailor their experience to suit their culture and language.
The Challenges of International Businesses
Always remember that your international expansion strategy will come with obstacles. It’s a major business decision that has its own unique problems. Here are some of the possible challenges that you might face when going global:
1. Language or Cultural Barriers
The most common barrier you’ll encounter is language. A good way to deal with this is to get bilingual staff members that can help translate for your business. An option if you don’t have the money is to outsource processes like customer service overseas.
Another obstacle you need to overcome is the different cultural norms. It’s important for you to research the local cultural practices in the countries you want to sell to. It’s possible that your international customers’ needs are different compared to your local audience.
The way people communicate can vary depending on the country. For instance, people from Northern European countries are blunt. In contrast, their Southern counterparts value a lot of personal conversations before cutting to the chase.
Keep that in mind to ensure that your marketing campaign is a success. You don’t want to market yourself in a way that the country sees as rude or impatient.
2. Tax Codes and Compliance Issues
It’s challenging to try learning about the varying tax codes, business regulations, and standards of packaging. It’s important to remember that the U.S. taxes your worldwide income. The IRS also requires special reporting criteria for this type of income.
Foreign banks might not want to deal with U.S.-based companies. The main reason is due to the administrative complications.
That means it might be better for you to set up a different business entity for your foreign needs. You also need to set a foreign bank account to handle your transactions.
Packaging standards can vary depending on the country you’re in. For example, packages in the United States only need English and Spanish directions. European countries might need translations for up to 24 languages.
If you plan to sell on a more regional basis, you need to consider packaging costs. The increase in price comes from the labeling. It’s important that your product complies with the country’s standards in terms of safety.
3. Slower Pace
The business world moves at a rapid pace when it’s in the United States. But you need to consider that other countries’ business paces won’t move as fast. What this means is that you need to commit to building long-lasting relationships with your overseas audiences.
Doing business in other countries is a personal matter. It’s always going to take longer for things to get resolution. But don’t take that as a sign that your global growth momentum isn’t there.
What this means is that you need to stay patient. Prepare your business to interact a lot before building trust.
4. Local Competition
Foreign customers tend to trust their local brands more. Some companies with big names can persuade audiences better. But small to medium companies need to try harder.
Your company doesn’t have as much influence, meaning that it’s harder to persuade international markets to choose your products over their local businesses. Instead, it might be a better idea to focus on your local marketing with SEO. Often times, when redirecting funds and advertising dollars to online and organic search, it can give local businesses and brands an upper hand on the competition.
Always ask what your product can offer to make your potential customers buy it. Ask whether it’s worth trying to penetrate their market. If you can, is it possible to profit under the situations you’re in?
You need to assume that your business is at a disadvantage. You’re a disruptor, but it’s important to assess whether the efforts are worth the profits.
Go International Today!
Before you make this major business decision, think about all the things that can happen. You need to think about the possible problems that may arise. It’s especially important during the expansion process.
The best way to know how your business will fare is to travel to your potential country to get a first-hand idea. This gives you the means of researching the local cultures. It reinforces the other aspects of your business strategies.
Make sure that you get as much information as you can. This helps you understand the foreign market you’re trying to enter. Make sure to do this before you go international.
Do you need business startup ideas? Check out our guide here to help you launch your business and plan ahead for your big ambitions.