Q: We have a product that we think would sell very well on the international market, however, we have never sold anything on a global scale before. What are the first steps, how do we proceed, what should we be concerned about, and so forth.
Gayle, Connecticut
A: If you want to really understand how vitally important it is that we all begin to think globally, then I suggest you read The World is Flat by the New York Times international columnist Thomas Friedman. Not only is he the kind of writer that makes other writers jealous (argh!), but his book is a fascinating dissection of just how radically different business has and will become.
Friedman’s basic thesis is that politics, free trade, the triumph of democracy over communism, computers, the Internet, telecommunications, and technology generally have leveled — or flattened — the playing field. Because it is now so easy to work together virtually, not doing so is not only missing an opportunity, it is missing the boat.
So how do you do so? Here are Steve’s 7 Steps. (Keep in mind that the easiest way to go global is to simply set up a website and ship internationally. The answer below is for the business that wants to physically be present in other markets):
Do Your Market Research. As always, I recommend that you look and think before you leap. A little research — telling you if your idea is viable, if your business translates internationally and so on — will save you a lot of time and money down the road.
Start with the U.S. Department of Commerce, International Trade Administration. They have a network of approximately 2,500 trade experts in 70 countries and about 70 cities in the United States who will help you understand how to do what you want to do. To find the nearest office to you, go to www.commerce.gov/statemap2. Also, check out www.trade.gov, and for free global trade exporting help, call 1-800-USA-TRAD(E). This is also the time when meeting with a SCORE counselor would make a lot of sense (www.SCORE.org).
The whole idea is to find out if there is an international need for what you sell, what the infrastructure and culture of the country are like, and if you would be comfortable doing business there. If you conclude that you nascent plan makes sense, begin to narrow your choices and identify your most likely markets.
Prepare For Pitfalls. Do the countries you have targeted do business in English? How stable is the currency (you don't want to have to wildly raise and lower prices due to changing values.) Will your marketing materials and sales techniques translate? Finally, make sure you understand the etiquette of the country you will be dealing with — check out www.polishedprofessionals.com. (I learned the hard way when I was in Mongolia that drinking Genghis Khan Vodka is expected of business associates…)
Decide How You Will Distribute Your Product. You can hire a fulfillment house, open your own foreign subsidiary, hire agents or representatives, hire a distributor, or set up a joint venture. To find a joint venture partner, go to www.ita.doc.gov/td/oetca/.
As you go about deciding, keep these tips in mind:
Deal With Legalities. There are many laws that regulate the export of American goods and products. You may need an export license depending upon what you are selling, and keep in mind that certain products cannot be sold (hazardous materials mostly), and certain countries and organizations are verboten (e.g., al-Qaeda, North Korea.)
To understand all of the different legal hoops you may have to jump through, go to the Trade Compliance Center: www.tcc.mac.doc.gov
Today’s tip: Top ten world flatteners according to Thomas Friedman: