In the words of Confucius, the cautious seldom err. This adage holds especially true for small business.
As Gush expanded Cetacea, he eventually understood the benefits of having a set pricing structure and ultimately put one in place. As Cottrell exported hair-care products to more countries, he altered the packaging and instruction sheets to fit the needs and preferences of various cultures. And as Frank experienced failed partnerships, she learned the hard way about the importance of research. But despite these stumbling blocks, all three entrepreneurs went on to build profitable international businesses.
Learn from those who have gone before you when you take your business into foreign lands. And keep these points in mind:
- Don't rush in. "Impatience causes [entrepreneurs] to do some stupid things that can jeopardize key relationships," says Monti. It takes time to establish your company in an international market and form lasting business relationships. Although Americans prefer efficiency, much of the rest of the world moves at a slower pace. It all comes down to understanding cultural idiosyncrasies and realizing they play a vital role in all international relationships.
- Don't consider your business a domestic one in an international market. Instead, develop a real commitment to your company's international clients and partners, and localize your efforts.
- Don't entrust the management of an international operation solely to U.S. expatriates. "In my opinion, it's not the best strategy," says Monti. "While they understand the company and the product, they don't understand the local practices and culture and don't have the relationships. The best strategy is to have a local general manager with a support staff that could be seeded with U.S. expatriates."
- Look into using local suppliers. Continuing to rely on your U.S. supply chain instead of a local one could be a major setback. "You really miss out on the opportunity to take advantage of being local," Monti says. "And when you extend that supply chain across a border, not only do you increase the cost of maintaining it, but you also increase the cost of managing it."
- Loosen up. Being too inflexible or conservative can also hurt your business, especially when it comes to credit terms. "In many cases, an importer will be approached by many exporters, and they'll not only compare the quality of products but also payment terms," Miner explains. "The trend nowadays is toward open account payment terms." Unfortunately, that tendency undermines the safety ensured by a letter of credit. But with competitors in Europe and elsewhere offering lenient options, you really don't have a choice--that is, assuming you've researched the company enough to decide that its reputation and net worth are acceptable. "It's a reality--you have to do it," Miner continues. "If you're going to penetrate a market, you have to be competitive."