Tricks of
The Trade:
What You
Need To Know To Take Your
Business Global
The benefits of exporting
are clear—diversified
customer base, insulation
against domestic economic
dips, and more overall sales.
If you’d like to capture
these advantages for your
business, how do you get
started? And what can you
expect once your export sales
have gotten off the ground?
Read on for ten tips on
becoming a successful
exporter—and pitfalls to
avoid.
Do have an export
strategy.
Small companies that
succeed internationally are
those that have a plan. This
takes research and
forethought—but will save
you time in the end. No two
businesses or products are
exactly alike, and that’s
why every new-to-export
company needs its own
get-started strategy. Your
first step is to determine
your product’s export
potential. If a product has a
solid market in the U.S.,
chances are good that it will
have international appeal,
especially if it is unique or
technologically sophisticated.
If a product is truly
one-of-a-kind, one splashy
trade show exhibit or a good
Web site may be all you need
to attract your first
international inquiries. On
the other hand, if yours is a
product that has competition
in the U.S. market, expect at
least some similar competition
in many international markets.
Next, assess your
company’s export readiness.
Consider the demands that
international business will
place on key resources and
people, and think about how
you'll handle the new business
exports will generate. Can you
increase production if
necessary? Are you familiar
with shipping processes and
export regulations? Free or
low-cost export seminars
sponsored by U.S. Commercial
Service and other federal
agencies like the
Export-Import Bank are
available to help you
familiarize yourself with the
basics of exporting.
Don’t expect overnight
results.
Turning your company into a
global player takes time. Even
if your goals are
modest—enter one new market,
find two international
distributors—be patient.
Most small businesses find
that the payoff is worth the
wait. Once you’ve identified
a great buyer or distributor,
remember that international
sales take longer to complete
than local ones. Shipping
samples, waiting for
responses, checking
backgrounds and making
international trips take time.
In fact, before you go, check
out the MDEC guide International
Business Trip Planning
which will help you in meeting
your trip objectives.
Although some small exporters
have dramatically cut
transaction times using online
tools, exporting is not a way
to make a quick buck. But if
export sales is part of a
long-term business strategy,
the returns can be enormous.
Do your homework—every
step of the way.
Targeting best
international markets for your
product or service should be a
first step. Take advantage of
free market research from the
Commerce Department; much of
it is available online at http://www.export.gov/marketresearch.html.
Research which markets are
best prospects for your
sector, and also investigate
general economic and political
issues. Keep in mind that some
international markets are
easier for first-time
exporters to enter than
others. Canada and Mexico are
traditional first export
markets because of their
geographic proximity, similar
consumer preferences, and the
simplified regulations created
by the North American Free
Trade Agreement (NAFTA). But
don’t discount
English-speaking markets like
the United Kingdom and
Australia, which experts say
are also good
"starter" markets.
Before you make a
commitment to proceed, assess
your own readiness: Questions
for the Exporter.
Your research does not end
once you have identified a
market. The wise exporter
reads up on business
practices, cultural issues,
methods of payment, and more.
A good source for Michigan
Exporters is the University of
Michigan's Kresgee Business
Library. Export Michigan
is pleased to present a
web-based guide on how to use
the library in preparation of
your International Business
Plan: International
Business Research Strategies
.
Likewise, if you're
planning to either attend or
exhibit at a trade show,
consider using our handy guide
Selecting
and Participating in an
International Trade Show.
Use the same diligence in
selecting your international
bank and freight forwarder.
Selection criteria vary but
good guides can be found here:
Questions
for Your Banker and Questions
for Your Forwarder.
ExportMichigan.com articles
on these "starter
markets" can be found at:
Australia
- Australia
WebGuide - a handy
collection of information
sources on the country
"Down Under".
Canada
- Is
it There Yet?
- The single most
important question asked
of Canadian Customs House
Brokers is "Has my
shipment been
released?"
- Make
Doing Business In Quebec
Easier - In their
first experience as
exporters of goods to
Canada, some U.S.
companies may have faced
certain difficulties
related to language,
particularly if the
product was marketed in
Quebec. Usually the
difficulties reported
involve the translation of
commercial documents,
invoices, product labeling
and other literature
requirements.
- Maximize
Sales in Canada
- Although many U.S.
companies have made
arrangements for what
should be a national
distribution system in
Canada, this may not
always be the case. Often,
products are combined in a
multi-line, cross-sector
offering by national
wholesale chains as
commonly seen in general
industrial products,
hardware, domestic
consumables and similar.
The alternative, a
regional selling force
based on local
representation in each of
Canada's five regions, may
provide a new opportunity
to truly improve the
bottom line on exports
headed north. The question
which needs to be
addressed by U.S.
suppliers is whether or
not they are receiving the
best selling force
available in Canada to
maximize market potential.
- You
Want to Sell in Canada,
Eh? - Canada
represents the largest
market for Michigan
exporters. This
handy guide will help you
to either enter the market
or expand your existing
sales.
- Temporary
Entry Requirements for
Canada - Every
day in Canada, innumerable
commercial items enter the
country on a temporary
basis. Canadian Customs
officers are very familiar
with temporary entries,
and U.S. exporters, as
well as Canadian
importers, should be
prepared with some basic
background knowledge of
what to expect when goods
are being brought into
Canada but will be
returned to the United
States at a later date.
- Canada
WebGuide - a handy
collection of information
sources on Michigan's
largest trading partner.
Mexico
- Mexico
WebGuide - a handy
collection of information
sources on Michigan's
second largest trading
partner.
United Kingdom
- United
Kingdom WebGuide - a
handy collection of
information sources on
Michigan's largest
European trading partner.
Do use the Web to reach
international customers.
Internet access in many
countries is as common as it
is in the U.S., and time
differences don't matter
online. Make sure your Web
site is up-to-date and
user-friendly. If you don't
have the resources to build a
cutting-edge site, create a
catalog on an online export
marketplace. The more product
descriptions, specs, and
photos you offer online, the
more international interest
you’ll attract. Plus,
referring inquiries to your
Web site is easier and cheaper
than shipping an entire
catalog overseas. If you can,
include some content, such as
product descriptions, in
foreign languages. As you
become more comfortable with
international sales, you may
be able to conduct entire
deals over the Internet.
Make your website work for
you. There are
substantially more ugly and
bad websites than there are
"excellent" sites.
Strive to make yours
"excellent" with
fresh content, jargon and
abbreviation free content,
good site navigation,
translated pages and a good
"package 39" to
attract and screen potential
agents or distributors.
Learn more here: Package
39. Another good
article is: Web
Site Localization.
Do respond to
international inquiries.
It has been estimated that
up to one-third of inquiries
from international customers
to small and medium-sized U.S.
companies go unanswered. Why?
Companies are often too busy
or unsure how to respond. But
these companies are missing
out on a significant source of
new sales. Specialists at U.S.
Export Assistance Centers can
help businesses respond to
inquiries and turn them into
sales.
Do remember that personal
relationships are key.
While most U.S.
businesspeople would agree
that relationship building is
essential, personal contacts
can be even more important in
some foreign markets. Don’t
rush negotiations—build
personal relationships first.
Business customs vary greatly
between countries, of course,
but common courtesy will play
well anywhere. Stand up when
you greet someone, engage in
small talk, and don’t be in
an obvious hurry to get down
to business.
Don’t underestimate the
importance of cultural
differences.
Know the do's and don'ts of
each country you’re
targeting. In some cultures,
certain gestures, expressions,
and even colors or numbers are
considered offensive or bad
luck. For example, showing the
soles of your feet is rude in
some Islamic societies, and a
gift of purple flowers in
Brazil signifies death.
Directness is a virtue in some
countries, like Switzerland,
but can be interpreted as
rudeness in others, like
Japan. Arriving in a foreign
market without knowing the
basics of its business culture
can render your entire sales
pitch useless.
Language issues are another
potential hazard for the
unprepared. It’s true that
many foreign businesspeople
speak English. However,
knowing a few words in the
local language--even just
"Hello" and
"Thank you"--can
make a big difference in the
way you are perceived.
Awareness of language issues
will help you avoid marketing
pitfalls as well. Take the
classic example of the Chevy
Nova. When the car was
introduced in Mexico, sales
were poor. Why? As anyone who
remembers high school Spanish
can tell you, "nova"
translates to "doesn’t
go." Another U.S. company
wanted to move into Sweden's
e-commerce market with the
domain name getgift.com. While
it makes sense in English, it
means "go get poison for
goats" in Swedish.
Additional reading on
cultural aspects of business
can be found at Before
You Go.
Do your due diligence.
There are few situations
worse for a new exporter than
to discover that the
international buyer or partner
they’ve signed has less than
honorable intentions. The vast
majority of the people you
will meet overseas are honest
businesspeople, but just as in
the U.S., bad apples do exist.
Your job is to keep from
getting burned by them. U.S.
embassies overseas can do
background checks on potential
partners or buyers. These
checks can range from discreet
inquiries about a company's
reputation to more extensive
investigations of credit
history and business
practices.
Common sense plays a part
too. If you feel undue
pressure from a potential
distributor, don't sign them.
If a potential partner
encourages you to disobey or
disregard U.S. or foreign
laws, don’t do business with
them.
A guide to international
credit reporting organizations
can be found at Sources
of Credit Information.
Do make sure you get paid.
What’s a sale with no
payment? Use letters of
credit, cash in advance, and
other financial instruments to
keep from getting burned. Once
you’ve established a
relationship with a buyer, you
can try other methods of
payment. Extend credit
cautiously, and only after
thorough background checks.
The old adage is "If it
sounds too good, it probably
is." You may wish
to review Internet
Fraud or How
Well do You know Your
Customer?
Don’t go it alone.
The U.S. Commercial Service
has offices around the world
to help small businesses like
yours begin exporting. You can
get free help designing an
export strategy that’s right
for your business. Savvy
exporters have also learned
that trade
finance programs offered
by the US Government can be a
valuable tool in competitive
markets.
Date Updated: March 27, 2007
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