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Smart Tips for Doing Business Internationally
For many businesses, the only way to grow revenue is to make the decision to expand oversees. You may find that the U.S. market has heavy competition, low profit margins and increasing marketing expenses. You’re spending more money to grow a business with low margins.
Doing business internationally presents many challenges. The new venture may require a huge capital investment and thousands of hours of company time. If business overseas is new to you, you need a game plan to avoid serious financial losses.
Here are some tips that can make doing international business easier:
Finding growth for your business
Doing business overseas can be a great way to grow your business. Some companies may find a growing market for their product or service in foreign countries. In fact, many firms founded in the U.S. now drive most of their sales and earnings from outside the United States. However, planning for this type of growth is critical.
Before moving into a foreign market, do homework. Perform market research to determine the demand for your product. If you sell mountain bikes, is there a market for your product? What price are customers willing to pay for your bike? Do you need to modify your bike production to fit your customer’s preferences? These answers will help you plan your expansion. As this article explains, small and mid-size companies can expand overseas.
Business growth overseas
Many countries in Europe and the Americas have experienced growth in business startups in recent years. Canada, for example, saw an average of 15,000 new small business startups between 2002 and 2007 (CBC News). England had 102,000 business startups in 2012, which included businesses of all sizes (British Government). Finally, Germany experienced a 350,000 increase in business startups in 2012 (European Union). This also included businesses of all sizes.
Deciding on your organization
Some companies start doing business overseas using a local firm as an intermediary. Say that you make running shoes. You determine that France is a good place to expand your business. Rather than opening your own retail store chain, you decide to sell your shoes through an existing French sporting goods chain.
There are several benefits to using an intermediary. Most importantly, the French firm knows the market for local shoe buyers. They can help you choose shoe styles and set a price that will drive sales.
The foreign firm can also help you with the legal and regulatory requirements of getting your product into a country. Most developed countries have a formal importing process. Companies are required to fill out paperwork. The foreign country may inspect the goods when they arrive at the destination.
You should also consider the logistics of moving your product to the foreign location. This process may require several types of shipment. If you manufacture mountain bikes in the U.S., you may ship them to France by cargo ship or by air. Once they arrive and are inspected, the bikes need to be moved to stores by train or truck. Many firms hire logistics companies to help them move product.
Funding your international business
If you do decide to go international, you need to be able to properly fund your business operations. You may need to rely on an international money transfer service, which could still require that you develop an understanding of currency exchange rates.
If, for example, your doing business in France, you need to know the exchange rate between the U.S. dollar and the Euro. This article discusses currency exchange rates.
An international money transfer can address your funding needs. Several companies can help you with this process. The Ria Money Transfer website provides some useful information these transfers. A money transfer company can provide an exchange rate for your currency. You can move funds and track the progress of your transfer.
To make international business easier, consider hiring a logistics company and an international money transfer firm. You might also collaborate with a local firm that can help you get your product to customers.