Eight Tips for International Business
Author, columnist, and management consultant Jeff Wuorio offers this checklist when considering international business:
1. Lose your tunnel vision.
This is step No. 1 in taking your business across borders. Forget the misconception that conditions around the world are just as they are in the United States — or should be. They aren’t, and they never will be. The sooner you embrace that essential truth, the faster you’ll latch on to other salient issues for doing business overseas.
2. Get to know the culture.
Someone once said that it’s an incredible faux pas to offer a Japanese executive your business card without first turning it around so that he or she can read it right away. That detail illustrates the importance of understanding the traditions and nuances of the cultures with which you wish to do business. Check out Web sites that discuss various cultures; if possible, talk with businesspeople from foreign countries to gain a sense of appropriate business practices. Is a handshake sufficient to close a deal? Is bribery an accepted element of business leverage? “I once spent an entire summer in Europe asking waiter after waiter when I was going to get some ice in my water,” says Richelle Shaw, chief operating officer of workz.com and an authority on developing business overseas. “We think the ways of America are the ways of the world, and they’re simply not.”
3. One size does not fit all.
Granted, barriers are breaking down worldwide, but that still doesn’t mean that one product will work in every situation. Expensive, proprietary software likely will not command the attention of a developing third-world nation that it would in Western Europe. Part of getting to know a country’s traditions and culture is understanding interest and demand. That, in turn, can help better direct marketing and other sales efforts.
4. What price is right?
Likewise, it’s essential to understand what pricing structure is going to be attractive — but nonetheless profitable for you — in various parts of the world. Again, less developed nations may not be suitable if a product or service is too expensive. By the same token, more affluent cultures may be able to obtain like products less expensively than you can offer. This can really be an overwhelming task, one that often happens through trial and error. “It’s usually a good idea to start prices a little bit high and then come down if need be,” Shaw says.
5. How are you going to ship your product and at what cost?
Depending on where you want your wares to go, it’s essential to gain a realistic grasp of prospective shipping costs (likely more than you think). Equally important is establishing who’s going to pay that bill. If you’re setting up an international network, make certain you negotiate whether you or your customers will be covering shipping (or, by contrast, if you can share costs). “The European Union has that Value Added Tax that always adds to the cost of goods,” Shaw says. “You should also pay attention to the culture of the country in which you’re doing business. That may dictate who should pay shipping.”
6. How will you get paid?
Credit card use is far less common internationally than it is within the United States. Give just consideration how you’re going to set up a reliable payment structure. Look into wire transfer systems or, if you’re doing business on the Internet, online payment programs (it’s a way of getting what’s owed you, and many also offer currency exchange features).
7. Consider language differences.
If you operate a small business on an international scale, not everyone who stops by your Web site is going to speak English. That means another salient issue is making sure your site content also offers services in a sufficient number of languages. On top of that, recognize that the time will come that an overseas customer, like his or her American counterpart, will want to speak with a living customer rep. So don’t overlook staffing, or having access to, bilingual customer-service personnel.
8. Pay attention to politics.
Lastly, never overlook the political environment — or even worse, the threat of terrorism — in areas where you hope to do business. That’s particularly true if you’re planning on siting a warehouse or some other facility overseas. Make certain you gauge the economic and social stability of prospective markets, not merely to protect any resources that happen to be located there but also to ensure that any goods shipped will, in fact, arrive at their intended destination. Also, make sure you are dealing with a country that is receptive to products from the United States. But, adds Shaw, don’t let attention wilt into fear. “If you’re an entrepreneur, you’re a risk taker,” Shaw says. “Don’t let politics deter you completely. That’s especially true if you’re selling on the Web — anyone can access you there. Always keep in mind that it’s truly a global market these days.”