Thanks to President Obama’s recently announced National Export Initiative, now may be a good time to expand your business globally. The program aims to increase financing and other support to small businesses and, ultimately, double the amount of exports over the next five years.
Whether or not that goal can be attained, it underscores how crucial international expansion is for small businesses is these days. Branching out globally opens up new markets able to boost business when economic growth is slow at home. “You don’t put your eggs in one basket,” says Ayse Oge, President of Ultimate Trade, an international trade consulting and training firm in Encino, Cal. “It has a huge impact on the bottom line.”
But, expanding globally also is a major undertaking. You’re dealing with different cultures, tax structures, regulations, distribution systems—you name it. That’s why the key to success lies in your first steps: how you prepare, research and do your homework before signing your first deal. These resources can help:
U.S. Department of Commerce. This should be your first stop. There’s a virtual goldmine of information and advice available through this department, including:
- National Trade Data Bank. This massive database provides import and export information from 19 government agencies. Chances are, whatever you’re looking for is here—everything from market size and growth projections for a particular product in a specific country to upcoming trade shows, currency exchange rates, and tariffs. You can get access to it at your nearest Commerce Department or SBA office or from home, if you subscribe. Or you can go to the closest library that has access to the data base and get it for free
- Gold Key Matching Service. A customized service through which specialists in specific countries connect you to buyers, agents, and distributors, all of whom have been pre-screened. “They check the credit-worthiness and reputation of the buyer for you,” says Oge. “That’s important, because it’s hard to know just how reliable they are otherwise.” They’ll also organize a trip for you ahead of time, scheduling meetings for you with potential partners and helping you out while you’re there.
- Additional services. You can also meet with other specialists who can do everything from helping to find the most appropriate country for you to enter to making sure you have the right paperwork. They can help you find buyers and agents, too.
- U.S Export Assistance Centers. Located in 19 major metropolitan areas, these centers are operated by Commerce, together with the SBA and the Export-Import Bank of the United States, which provides guaranteed loans for exporters. At each center, you’ll find experts who can provide technical help.
Shipping companies. Through FedEx’s Global Manager option, you can get detailed demographic and statistical information about specific countries. UPS Tradability also provides information about compliance, regulatory, and tax matters in specific countries.
Local trade associations. It’s likely your area has its own regional or local trade association, which probably also can provide you with information. Oge, for example, holds breakfast meetings through the Valley International Trade Association in Los Angeles every two months focusing on such topics as compliance issues or information related to specific countries.
Visiting the country. No matter how thorough the research is, you still need to hop on an airplane at some point and spend some time in the country you’re targeting. That way, you can meet with potential buyers in person and get a better feel for your customers.
In-house preparation. You also have to start getting your internal operations ready to handle the new business-- making sure your employees have the necessary technical knowledge for selling in another country, for example. But don’t go overboard. That means getting started with one order in one country, so you can gear up your facilities and get rid of all the kinks before expanding any further. Says Oge: “Start small.”