Preparing Your Business to Go Global


This series is commissioned by UPS.

A few weeks ago I pointed out how to ready your website for international business — everything from translating your website text, to search engine optimization in other languages.  That article sparked thoughtful discussion.  So this week I thought I’d expand the discussion beyond your Web presence, and focus on how to prepare your business as a whole to go global.

global expansion

Depending on the industry you are in, and where you intend to seek business, here are 5 considerations before you take that big leap:

1) Don’t assume you have to be big to go global — A few years back the Council on Competitiveness coined the term “micro-multinational” to describe startups that go global from day one (or nearly day one).  In fact, we’ve published an entire series on micro-multinational companies.  So rather than following the old-fashioned path to global growth, which meant expanding regionally, then nationally before finally going international years later — today you can leapfrog over those steps.  It’s largely thanks to inexpensive technology and services designed to help small businesses operate across borders with the same efficiencies as large businesses.

2) Research the legal, HR and tax environment in any countries where you will have a physical presence, before you leap  — If you need or plan to have a presence in or ongoing sales to another country — such as local employees, local warehouses or exports of goods to that country — be sure to investigate all legal, HR and tax implications.  They can add considerable cost to doing business, not to mention getting your business into hot water if you don’t comply with local laws and regulations.  That’s a distraction you don’t need!

Previously, I interviewed Larry Harding of High Street Partners, a company that helps small businesses navigate the compliance issues of doing business internationally:

According to CEO Larry Harding, a handful of issues come up repeatedly when companies desire to expand overseas. “It’s easy to do the things that are readily apparent, but below the surface there are so many more things to look out for.  It behooves companies that are in the planning stages of international expansion, to factor in the costs of compliance.” He pointed to these two typical pitfalls as examples:

  • Employment Regulations and Practices – These are very different overseas. A typical pitfall might involve a company sending its U.S. offer letter to a prospective employee in the European Union, without realizing that they really need a full-blown employment contract that complies with local regulations. The ramification is that it immediately tilts the balance of power greatly to the employee, at the expense of the company, and makes termination difficult.
  • Shipping and Importation – Many U.S. companies don’t have a good handle on shipping product overseas. There are a complex set of rules about importation and logistical issues. A typical pitfall is that something arrives on the dock and a duty must be paid. The company shipping ends up paying and it can be sizable — sometimes 17% — eating up the profits.

3) Invest in technology from the get-go — The right technology, especially cloud based software, can position your business to scale without adding incremental cost or a large staff base.  Web-based software services, email, social media and inexpensive telecommunications bring the world to your fingertips, helping bridge wide distances.  And just as importantly, technology can make the job of gathering market intelligence and marketing your business internationally, much easier.

Laurel Delaney, CEO of GlobeTrade.com, noted the importance of social media and the Web in a recent article about small businesses considering international expansion.  Laurel wrote:

How else will cross-border customers find you?  If you are still thinking about whether your business should launch a blog or be on Twitter, forget the notion of taking your business global.  You are too myopic!  You need to position yourself on relevant networks and beef up your communication efforts.  So for all you aspiring global enthusiasts, pony up the nominal fee to set up a regular website, start a blog, and get on Twitter, Facebook and LinkedIn.  Use effective marketing to get noticed.  The more online platforms you use, the better your chances of being discovered.  When a customer bites, test out your price, see what reaction you get and then negotiate from there.

If you offer products on an e-commerce platform, can customers buy … at every destination point?  Make sure you focus on customer support, fulfillment and being user friendly.  Accessibility is paramount considering all the different time zones we operate in.  Make it easy for customers to get help should they need it.  Your site should be attractive and functional.  Speed is also important when considering users in remote parts of the world with dial-up connections. Do what you can to help them buy from you without a hassle.

4 ) If you plan to export physical goods, get exporting help — There are many considerations tied up in the decision to export.  You have to understand your market in the country you are targeting.  You have to understand exporting laws and regulations, both here in the United States and in the target country.  Sometimes licenses are required. The U.S. Federal government has done a good job on a website to provide you answers to these and many more questions.  On Export.gov you can:  take advantage of international market research; learn about trade missions and trade events; begin your investigation into export licensing requirements; and even get personalized answers to your exporting questions via email and phone.

5) Figure out how you’re going to get paid — Doing business internationally used to rely heavily on letters of credit.  Letters of credit are still widely used.  But luckily today there are easier and faster options, especially for smaller-ticket transactions.  PayPal and American Express’s FX International are two of the most popular options for international payments.  Moneybookers.com, Xoom.com and even Western Union are lesser-used alternatives, but still may fit in situations where PayPal or FX International are not available, or as an alternative.  For instance, while PayPal covers many countries, your buyer may not have access to PayPal in the country you are selling into, but one of the other alternatives may fit the bill. Decide up front your desired method(s) of payment, and know the ins and outs so that you aren’t rudely (or expensively) surprised.

These are but a handful of the issues to consider when going global.  For additional insights, read:

The Hidden Challenges Lurking in Global Business (John Jantsch’s interview of two entrepreneurs and their challenges going global).

Start and Run a Profitable Exporting Business (the entire book is now available free of charge on Google Books)

Managing Methods of Payments on Export Sales (again we turn to Laurel Delaney of GlobeTrade for her expertise)

9 Comments ▼

Anita Campbell - CEO


Anita Campbell Anita Campbell is the Founder and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses, and also serves as CEO of TweakYourBiz.com.

9 Reactions

  1. As a business, knowing your way around an internet is a must in 2010.
    The ones that still fail to make the conversion to online will fizzle out the next 10 years.

  2. Anita Campbell

    Guy, that’s very true. And it’s especially important to businesses that are international in scope. The Web makes some aspects of geography irrelevant or, at least, not an impediment to doing business.

    – Anita

  3. Martin Lindeskog

    Anita, I like this series on globalization and export issues very much. Lots of food for thought.

    You are right about the statement: “Many U.S. companies don

    • Anita Campbell

      Thanks, Martin. Given your international perspective I really appreciate that praise.

      Yes, the landed cost, including duties, is not something that we tend to think about here in the United States, unless we have previous experience with international business. It can eat up your entire profit — and then some.

      – Anita

  4. Exporting can be complicated, so getting some help is a must. Great point Anita.

  5. Martin Lindeskog

    Do you know about any site that has specialized on export, import and global trade issues for small businesses?

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