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Tag Archives: Resources
One of the common misperceptions is that a business needs to be test launched in the US market before it can go global. Many companies start transacting internationally only when they receive inquiries via their websites and most advisors consider international expansion a second-level priority. The problem is that critical parts of the business (website, marketing, finance, IP protection and even mundane issues like product size and packaging) are set up for the US market and have to be redone to work internationally.
My experience in working with start-up and early stage companies over the past decade is that it never too early to start building an international business. In today’s global economy, as soon as you put up a website, you are involved with global commerce, even if you don’t import or export anything at that time.
The key to all of this is planning for international business from day one of operations. It means identifying a team of international trade experts (finance, legal, logistics, marketing etc.) that you can call on as needed (and not spend weeks or months trying to find the right answers) .Here are seven tips that I would recommend to every entrepreneur with a potential for international business:
- You need to define yourself as a global company. Take a look at your organization chart – it shouldn’t list international operations as a side box. Your company should have a global purpose with strategies for selling into specific markets.
- Your market development efforts should be global. That starts off with expert market research – the US government website www.export.gov is a treasure trove of reliable information. Your website should welcome international inquiries. If you are targeting specific areas, think about having selected webpage professionally translated into other languages. (Google translations are still embarrassingly bad).
- Your manufacturing and packaging processes should be acceptable outside the US. The simplest issue is using metric measurements, instead of English. Do you need international standards – for example ISO or CE? You might want to design packaging or labels to allow for a sticker to comply with local regulations.
- You should identify one or more logistics companies that can help you with the paperwork and shipping. All of them can advise you on potential issues (paperwork, certificates of origin, tariff levels etc. A good logistics partner can prevent disasters.
- You should have reliable and knowledgeable international finance and insurance partners. There are many government or private sector options so the customer really is in the driver’s seat. Just remember that it is frequently easier to get financing for an international shipment than a domestic order. Properly sequenced, there can be less risk in shipping to a remote third world country than shipping to the next town. Good banking, finance and insurance partners will be able to guide you along the right path, even startups.
- You similarly need a good legal team to support you. Notice I said having a team – not just one attorney. A good contract attorney will help prevent or easily settle disputes. On the other hand, if you have intellectual property issues (patents, trademarks or industrial secrets), you will need to find an IP lawyer specialized in international practice and ideally with experience in the markets in which you want to operate.
- You need to build international into your company processes. That means everything from manufacturing to invoicing. Management should reinforce the message to all employees that the company perspective is global. Your employees need to be trained to think globally and to be sensitive to how business is done is other cultures. The best way to achieve that is to build a staff with multi-cultural backgrounds.
CiViC 180, in partnership with K5 Launch (a business accelerator founded by members of the Tech Coast Angels), has started the International Business Accelerator (IBA) which works with startup and early stage companies to guide them through the growth process. The IBA has two physical locations: Long Beach and LAX. Applications are currently being accepted for the LAX location until June 27.
by Christopher Lynch
Exporters have to be customer centric. But, in addition to customers, exporters need to be aware of economic, political or social trends that could affect demand for the products or services. A change in the exchange rate from political decisions by a populist government can wipe out a market. A decision to begin negotiations on a free trade agreement can signal new market opportunities.
The exporter doesn’t have time to be the political analyst or economist – but there are some great online resources that I recommend for their accuracy and timeliness:
- The Economist Intelligence Unit: The EIU, a subsidiary of The Economist magazine, compiles economic and political data on every country around the globe. Because it is data driven, it is able to produce up-to-date analyses of what is going on in a market – macroeconomic data, key demographic and social trends and political outlook. I usually refer to the monthly reports for the best information, although the annual ones cover the country in much greater detail. I met regularly with the EIU country analysts when I was an international economist at various US Embassies and the analysts are competent and highly professional. My only caveat is that, being based in London, they view the world through British eyes. There is a fairly hefty annual fee to subscribe to the EIU – if you have a significant international operation, it is worth it. However, if you are a small or occasional exporter, your local public or university/community college library will let you have access at no cost.
- Country Commercial Guide: The Country Commercial Guide is produced by the US Commercial Service and is available at no cost to the public through www.export.gov. Updated annually, the Guides give an overview of the political and economic environment, tips on doing business in the country, trade regulations and investment climate in more than 150 countries and areas. The sections on trade regulations and investment climate can alert you to any impending changes in rules of commerce. Produced at US embassies and consulates around the world, the CCG also draws on the knowledge of the local employees of the Embassy, so the tips on doing business are generally right on. You should download and keep in your online library a PDF copy of the most recent CCG for every country that you to which you are currently or planning to ship.
- Country Fact Sheets: The US Department of State produces and regularly updates a Fact Sheet on each country. It outlines the positives (and sometimes the negatives) on every country or area around the world. Want to know what the official line is – check it out at www.state.gov.
We all know exporting is profitable – you can keep it so by keeping abreast of that latest in your overseas markets with a fifteen-minute read of these online resources!
Yes, I know this is the age of the digital book. But there is still room to have a few essential books within reach. Besides the pleasure of having a physical book with an index page that you can scan with one glance, there is the other recognition that Mr. Google doesn’t always give you the right answers. So, I recommend that professionals in international business keep these three books on their shelves behind their desks:
Kiss Bow or Shake Hands by Terri Morrison and Wayne Conaway (Adams Media 2005).
This is the bible for anyone in international business. The book lists business etiquette for more than 60 countries. A typical chapter includes information on history, politics, business culture, protocol and negotiating styles. This will help you understand where your business partner is coming from and why they do the “crazy” things they do. More importantly, it will help avoid making major gaffes. I remember the instructor I had in protocol when I joined the US State Department saying “A good diplomat is never unintentionally rude.” The same is true for a businessperson – you should always be the welcoming and correct partner.
Is this foolproof? No, there are always subtleties to another culture that just can’t be summarized in a book. But I’ve read closely the countries where I have lived or work and the information is pretty much right on.
Dictionary of International Trade by Edward G. Hinkelman, (World Trade Press 2010)
This is another essential book to have around. It not only defines commonly used INCO terms, it has information on topics like:
• Shipping information (air and sea)
• Documentation requirements
• International standards (ISO’s)
• Security requirements by country
• Key terms and words in eight languages
• Resources for shippers, and
• Much more
The Dictionary should be in every shipping office of every company.
The Little Red Book of China Business by Sheila Melvin, 2007, (Sourcebooks, Inc.).
As the Chinese market continues to open up in the West, the opportunities for you and your business are endless. But so are the opportunities for making the wrong move, saying the wrong thing and unknowingly jeopardizing your business in this market. I recommend The Little Red Book of China Business because it provides a unique approach to understanding the Chinese business culture by unlocking an essential key: The current generation of Chinese businesspeople grew up with the lessons and teaching of Mao’s Little Red Book, and these lessons guide their action in business and culture. If you don’t understand Mao and the Little Red Book, you don’t understand China business.
Sheila Melvin walks you through the key lessons of the Little Red Book, unlocking business and strategy secrets along the way. There are a number of books on doing business in China, but this one is unique in making the complex world view of the Chinese businessperson understandable to us in America.
— Chris Lynch