Managing a Small Business
Ready to Take Your Business Global?
Selling to Customers in Other Countries Is the New Normal
Is your business mostly local? Could markets exist for you in other countries? According to the Department of Commerce, more than 300,000 U.S. companies exported goods in 2013, and nearly 98 percent of those had fewer than 500 employees.
Here's how some entrepreneurs expanded across the globe
When Limitations Lead to Realizations
Adam Xavier believed his RoadLoK motorcycle anti-theft immobilizer was exactly what the American riding public wanted. And he was right, to a point.
"We realized our product might actually be better suited for riders outside of the States," says Xavier. "In the U.S., motorcycles are considered a luxury item, versus the United Kingdom where they are an everyday utility." Because U.K. riders were more familiar with using on-bike security systems, Xavier pivoted RoadLoK toward that market in search of increased sales.
New Markets Often Mean New Problems
Sam Firer and his partner made the decision to expand their public relations and consulting business into two overseas markets where they thought their techniques would be in demand: India and Japan. Things didn't always go according to plan.
"Many of the decision makers were very conservative and planned so far ahead that even medium-term results looked unrealistic," says Firer. "Not to mention going back and forth between New York and India really caused a serious case of dislocation for me. Sometimes I barely knew what city I was in."
Once they got their bearings, the company's international expansion plan flourished, but in ways they never could have predicted, says Firer. "My presence in India actually resulted in more Indian clients in the U.S., and my partner's efforts in Japan resulted in more public relations projects based in Japan." The firm also increased its consulting work for Japanese clients wanting to expand their operations into the U.S.
Understanding Foreign Customs (and Customers) is Integral
The road to growth, especially global, often leads to new territory, both literally and figuratively. For Xavier's newly global RoadLoK, that meant some fairly complicated hurdles.
"We thought it would be a few currency conversion issues and securing some solid, local contacts, but that barely scratched the surface," he says. Complex issues like the European value added tax, which affected pricing, and import duties and fees in China that forced the creation of local manufacturing relationships, were just the start.
Even something as basic as the local culture led to surprises, says Xavier. "In Brazil, the color purple can be associated with death and bad luck, which was terrible because our lock keys are purple. It was a simple fix, but it could have seriously affected our sales within that market."
What Does It Take for a Small Business to Go Global?
Big trips require big preparation, and there is no larger trip for a small business to take than deciding to go global. That's why the first thing any business needs to do is consider the following:
Do your research. Take the time to really get to know your customer – what they want, what they need and where exactly they are in the world.
Pay close attention to the culture. Never assume you understand another country just because they appear similar on the surface. The world is a big place with a multitude of variables. Your business can live or die based on the most subtle differences.
Learn the rules. Whether it's local taxes, foreign regulations or even U.S. laws regarding business activity in other countries, sourcing (and learning) this integral information can save huge amounts of time, money and headaches down the road.
So, is going global really worth all the trouble?
"It wasn't until 2008 that RoadLoK realized we could do much more business working with foreign regions in addition to our customers in the USA, but are we ever glad we finally did. Today, more than 70 percent of our sales come from overseas markets," says Xavier.
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Photo: Courtesy of RoadLoK | Jarrod Thalheimer is a regular columnist for BELLA Magazine and has written for media outlets like Off-Centre, Q Magazine, SheKnows.com and many more. AdFool, his cult-fave takedown of modern advertising, features more than 350 weekly columns