By Jon Dela Cruz, Researcher for iCompareFX
The world, as we know it, continues to shrink, and it is no surprise that an increasing number of small businesses are looking at going global. However, exploring new markets from different parts of the world is easier said than done. Even some big names have tasted failure in their endeavors to charter new territories, with Walmart and Best Buy’s performance in China, and Target’s in Canada, serving as perfect examples. So, what can you do to make sure your small business succeeds in going global?
Build a Local Point of View
There are a number of American small businesses that limit their international exposure to tried and trusted territories such as Canada, Europe, Australia, and New Zealand. While this is usually a safe route to take, it may benefit your business more if you look for territories where there is high demand for your products or services. For example, if you specialize in making jewelry, you may consider tapping into the Indian and Pakistani markets, because both countries' demands for precious stones and metals as well as costume jewelry remains on the rise.
Take into account that cultural differences might have an impact on your business, and if so, determine if you can take measures to bridge the divide. Ask yourself these questions before deciding to enter any new territory.
- Does the new market know about your products or services?
- Do your offerings have the potential to sell in the new market?
- Does the new territory make you feel comfortable?
- Will your business face high levels of competition?
Analyze the Competition
Succeeding in a new market where competition is high requires careful planning. Consider this – would you pick a known local brand or an international one you’ve never heard of before? When entering a new market, analyze your competition and try to come up with ideas that set your business apart. Ask yourself how you can provide more value than your competitors.
Pay Attention to the Trust Factor
When small businesses expand, it is normal for them to look for more vendors or suppliers. You may start by carrying out your business through an online marketplace and move to interacting with your customers directly. When your business reaches this stage, it is important that you deal with trustworthy third-parties.
Dealing with international customers also requires a high level of trust. For example, while you may not want to send products without receiving payments, your customers might feel wary about paying an overseas business in advance.
Deal with Forex in the Right Way
Once your business goes international, you will start receiving payments in foreign currencies. If you have overseas suppliers or employees, you will also need to make cross-border payments. In both scenarios, using the services of banks is not the best idea. Banks, after all, still tend to fare poorly when it comes to exchange rates, fees, and turnaround times.
Several fintech companies have entered the overseas money transfer industry, and most of the leading names provide services for businesses. Some such as TransferWise, WorldFirst, and OFX even offer free receiving accounts in different currencies, giving small businesses a cost-effective way to receive payments from different countries.
Small business owners who want to take their offerings to other countries need to understand that what works in their country might not work elsewhere. Determining if there is a demand for your offerings is vital, and make sure you take time to study your competition.
About the Author: Jon works as a researcher for iCompareFX, a website that gives users an easy way to compare the world’s leading overseas money transfer companies.