Reaping Business Success in a Foreign Market
Latest posts by StartupNation Writer (see all)
- Mama Beads & Baby Baubles Owner Finds a New Passion & Success - February 12, 2015
- Sweet Cake Designs Starts as a Hobby and Becomes a Business - February 11, 2015
- From Funding Startups to Existing Businesses Make VRCI Properties Your Funding Choice - February 11, 2015
Leaping from your comfortable U.S. base into a foreign market is a
huge decision. But once you’ve made it, your work has only begun. You
have to ensure that your move abroad is well planned and executed. The
future of your business may now depend on it.
news is that there are a variety of strategies and tactics that can
lead to international success for your venture. And there are plenty of
tools, resources and even allies available that are aimed specifically
at helping make small businesses successful overseas. Here’s how to use
Look for openings based on macro developments
It’s easier than ever to figure out what’s happening in markets abroad that may provide openings for your business.
Frichtel, for instance, learned from trade magazines and other research
that government cutbacks in health-insurance coverage in many European
countries had health-care providers and consumers scrambling for less
expensive medical devices. So Jesse & Frichtel Dental Labs, the
Pittsburgh-based dental-device maker that he co-founded, leaped into
Germany and Switzerland.
“Next year, those two countries will account for around 10 percent of our business,” Frichtel says.
But be wary of shifts in global economics
the same time, taking advantage of foreign possibilities increases your
exposure to economic and even political instability abroad that may
give you little recourse as a small, U.S.-based business.
Carter learned the hard way after the company he helps run, ROC
Exhibitions, began staging trade shows in Mexico several years ago.
After the first one was scheduled, Mexico devalued its currency by
half, meaning that the pesos to be used by potential exhibitors to
participate in the show didn’t go nearly as far.
great turnout from the audience side, but not from the exhibition side
– which is where we generated our revenue,” says Carter, director of
exhibitions for the Lisle, Ill.-based company. However, ROC has
persisted in the Mexican market and now is generating significant
revenues from shows there.
Grow with your U.S. customers
effective and generally safe way of entering foreign markets is to
piggyback on American customers that are expanding abroad. That way,
you already have a reliable account that will jump-start your business
in the new market.
That’s what Arthur Mabbett did when
he decided several years ago to establish a Scotland-based affiliate of
his Bedford, Mass., environmental-services firm, Mabbett &
Associates. Big U.S.-based customers such as General Electric, Raytheon
and Polaroid were willing to promise him business in the United
Kingdom. “And those connections, in turn, gave us a big advantage over
local competition – once we were over there – in trying to land other
accounts in the U.K.,” Mabbett says.
Take advantage of available resources
U.S. government actively promotes exports by American companies, and
most countries encourage investments by U.S.-based businesses in their
markets and economies. So there’s a raft of official and unofficial
One place to begin is the US Commercial Service, a federal site with a mother lode of information about helping your startup penetrate foreign markets.
sites, and links to foreign-government and other sites, will help you
navigate the many questions and issues you face as you go abroad,
including finding overseas agents and outlets, and understanding tax
and regulatory differences.
Many other resources also
exist for the sole purpose of making foreign expansion happen for you.
They range from freight forwarders who will help you figure out how to
package and ship your goods for export, to small-business bankers who
specialize in arranging payment terms that you can feel comfortable
with when dealing with foreign customers.
Leverage the Internet
Internet is a great leveler when it comes to doing business abroad, so
take fullest possible advantage of it. You can do this in many
different ways beyond just gathering information.
McGohan, for example, began selling new manufacturers’ leftover golf
equipment on eBay and soon realized he could tap into a world market.
Now, about 20 percent of the online orders to his Franklin, Ohio-based
company, ProShopWarehouse.com, are from abroad.
Inna Kassatkina extensively markets the translation services of her
startup, Global Language Solutions, online via foreign-based search
engines. “We tailor the meta tags of our Web pages so when a search is
performed in a foreign country or language, we show up,” says the
co-founder and president of the Newport Beach, Calif., company.
Our Bottom Line
you’re ready for foreign expansion is just half the battle. To make it
a net-plus for your business, rather than a distracting drag, you need
to plan and execute your move abroad carefully. Fortunately, many
tactics and resources are available to help you do just that.