Why take your small business global?
Before you decide to take the plunge into international business, consider why you are doing it. One reason might be to meet an unfilled demand in an overseas market. Another one could be that your local market is already saturated and you need to expand to grow. On the other hand, there are bad reasons for going global. One is that your competitors are doing it and you feel you are missing out. Another is that it seems cool and trendy to expand your business overseas when there is not a sound reason for doing so.
Do your research before expanding internationally
Get all the facts before spending time and money on international expansion. First, is there a market for your product or service in your target market? Do the numbers back your expansion plans? Can you export from your base in Australia or will you need to open a new office? Fortunately, the Australian Government assists companies wanting to export or expand internationally. Visit the Austrade website to find country and industry guides.
Besides researching the demand for your product or services, you will also want to research legal, HR and tax conditions if you plan to have a physical presence in a particular country. Are there rules and regulations that will affect your ability to be successful? Some countries put up barriers to international companies wanting to enter their markets, so you will want to make sure that you won’t be hindered when taking steps to expand internationally. Also, if you are exporting products, make sure they comply with local regulations. This includes getting licences if required.
If you are shipping large quantities of products, a freight forwarder can help you get your shipments smoothly into the new market.
Consider starting small and expanding later
Starting small can be an effective way to expand without assuming a large amount of risk. Selling your products or services online can be a good way to start. You can find customers advertising online in your target country. Setting up a local website, with locally focused content, will help you promote your product in that market. By starting small, you will be able to test the market to determine whether it’s worth investing my time and money in the expansion.
Another way to start small is to find a local business that’s willing to act as a representative for your products or services. This way you can avoid the expense of setting up a new office in that market.
Develop an international business plan
The research you conduct will enable you to create a business plan. Your plan should be tailored to the country you are planning to enter. In the plan, you will want to outline the market conditions, your goals, budget and cash flow. The sections of your international business plan will be similar to your domestic business plan. Find out more in How to Write a Business Plan When Applying for a Business Loan.
Be tech-ready for effective communication and promotion
Technological solutions, such as email, web-based software, social media and telecommunications, have levelled the playing field for small businesses wanting to expand internationally. Take advantage of these low-cost solutions to get your products and services into the new market. For example, customise your social media channels to suit the target country. If your new market is in a non-English speaking country, you will want to get a native speaker to create your social media and advertising campaigns.
Be tech-ready for effective communication and promotion
Technological solutions, such as email, web-based software, social media and telecommunications, have levelled the playing field for small businesses wanting to expand internationally. Take advantage of these low-cost solutions to get your products and services into the new market. For example, customise your social media channels to suit the target country. If your new market is in a non-English speaking country, you will want to get a native speaker to create your social media and advertising campaigns.
Consider currency issues and how you are going to get paid
If you are starting out small, you can probably use services such as PayPal for your transactions. For larger and more complex transactions, you will want to look at other options. These include having buyers raise a letter of credit to ensure you get paid after products are delivered. Another issue to consider is currency fluctuations. For large contracts, you could lose money if they exchange rate change over time. Fortunately, there are ways to protect yourself against these issues.
How you get paid can be a challenge when selling internationally. Learn more about trade finance.
In addition, the Export Council of Australia offers a range of courses and workshops to help small businesses go global.
Moula helps businesses grow with unsecured business finance. Learn more about small business loans from Moula.
