From the May 2000 issue of Startups

Once upon a time, the global marketplace was an arena reserved for the big players-companies that could afford access to the information and communications necessary to do business around the world. Today, the power of the Internet and communication technologies has made the global market just as accessible to the homebased entrepreneur.

"The Internet is an unbelievable tool," says Abby Shapiro, co-founder and CEO of International Strategies Inc. According to Shapiro, small businesses can access a wealth of country reports, market information and international business directories online, often at no cost. "With a few good sites and a directory of folks to contact outside the United States, you can do a lot just sitting in your living room," says Shapiro, whose Boston-based firm offers a wide range of reports and materials for import/export businesses. "Using e-mail and faxes, you don't even have to pick up the phone."

For many homebased businesses, a Web site is the first portal to the world. Steve Veltkamp, president of Biz$hop, a homebased publishing company in Port Angeles, Washington, that produces business guides and newsletters, points out that you don't even have to translate your site into another language. "English is the language of commerce, and the dollar is the currency of commerce," says Veltkamp, who began assisting other companies in developing foreign markets through Biz$hop in 1986. What matters, he says, is making your site "friendly" to international visitors.

Shapiro believes your Web site can also be an important source of leads if you're thinking of developing an import or export business. "Analyze where [orders] are coming from. If you have two dozen bids out of Canada, that tells you you have leads in that area."

Still another option for the homebased entrepreneur who wants to explore international markets is to act as an export intermediary, connecting U.S. suppliers and international buyers. According to Dennis Hessler, whose homebased Pensacola, Florida, company, Spyglass Point Productions , offers import/export and international business advice, all you need is sweat equity-and an understanding of the edge you bring to the marketplace.

One Click Away

International commerce often begins on a company's home page. Forrester Research reported in 1998 that nearly 50 percent of all Internet orders placed from outside the United States are ignored. "[Many] U.S. businesses have no clue how to send the product [internationally]," says Shapiro. "[It's important to know] what it will cost to get the product from Point A to Point B."

Shapiro recommends developing a checklist of what you can and can't do. For example, are you willing to handle multiple currencies? Can you calculate different shipping rates, taxes and tariffs? How will you handle background and credit checks? What about returns and service? "You need to understand your capabilities and limitations," advises Shapiro.

To encourage international orders, Veltkamp offers these tips to make your site globally friendly:

  • Design flexible online response forms so overseas customers can insert address information that doesn't fit "standard" U.S. fields (such as Zip code, state abbreviation or telephone number fields). Make sure forms won't be "bounced back" as incomplete if an overseas visitor fails to fill in a section.
  • Don't use country flags to indicate translated pages. Veltkamp points out that flags represent geographic regions, not language groups. A visitor from Quebec won't feel welcomed by a French flag nor will a Spanish-speaker from Mexico feel that that a Spanish flag represents his or her language.
  • Make it easy for international customers to determine how much it will cost to purchase a product from your company. Consider adding a currency converter to your site so visitors can determine price equivalents. (A free currency converter is available at Universal Currency Converter).
  • Don't create the impression that you assume the United States is the center of the commercial world. Avoid terms like "foreign" when referring to international customers. "The biggest complaint I hear from people outside the U.S. is that the Internet is too U.S.-centric," says Veltkamp.

Finally, make sure your page loads quickly. Many overseas customers pay for their connection by the minute and won't appreciate time-consuming graphics, Java scripts, animations or videos. Don't rely on glitz to sell your product; let your product sell itself.

Exporting From Your Living Room

Working at home is no obstacle to entering the international market, since the vast majority of your customers will never see your office. Instead of paneled walls and an oak desk, what you really need to reach the world is a good computer system-plus perseverance and common sense.

Veltkamp recommends you "first specialize in the type of product you want to sell. Then specialize in a country or small region of the world." The second decision, he suggests, can be based on your personal interests. "If you're interested in Central America, specialize there," he says. "That can help you get to know the people in the area and learn how the [the local businesses] deal, negotiate, set prices, do business, etc."

Shapiro recommends beginning by exploring markets with languages and customs similar to your own background. "Don't start with China [if you're unfamiliar with Chinese language and culture]; start with Canada or the United Kingdom. Then when you query for information, you know what they're saying."

Dennis Hessler agrees. "Canada represents an ideal opportunity to conduct research on a foreign country," he notes in his Import-Export Entrepreneur newsletter. "[And] just about anything that sells in the U.S. will be a potential product for the Canadian market."

Steps in the Right Direction

Regardless of where you begin, Shapiro notes that certain steps are essential to success:

  • Do your market research. "Find sources that can give you reliable current information [on your target country]," suggests Shapiro. "How stable is the government? What are the currency controls? Will there be a labor problem? How will you ship your product? Will it need continued service and who will provide it?" Shapiro notes that a host of online sources (including her own Export Hotline at http://www.exporthotline.com) offer in-depth country reports that can help an exporter learn about international markets, trade barriers and related topics.
  • Look for contacts within your target country. Agencies that can help include the U.S. Department of Commerce's International Trade Administration "country desks," the U.S. Embassy or an AmCham (American Chambers of Commerce Abroad) within your target country. Your target country's embassy in the United States can also help.
  • Network with other exporters. "Talk to people who are doing it, even if they're not in your industry," says Shapiro. "Get their experiences; listen to what they say and what they went through."
  • Attend export workshops at colleges or financial institutions. "Make sure you fit the profile of the intended audience," Shapiro warns, noting that seminars hosted for large companies may not meet the needs of a smaller exporter.
  • Find a distributor or agent. Ask your overseas contacts for references, Shapiro says. "Don't use the recommendation of someone's uncle or cousin. You need independent, objective referrals," she says. "Always ask for references and a credit check." Shapiro notes that there are lots of people who can help you through the hassles of international commerce, including brokers, distributors, freight-forwarders and customs agents. Many of these are now listed in online international business directories.

Veltkamp adds an additional recommendation: "There's a lot to be said for actually traveling [to your target country]." Part of the fun of international commerce, he says, "is the acceptance of other cultures, the enjoyment of dealing with different folks. A sense of adventure is useful in making that international jump; exporting surprises you at every turn."

Making Connections: Becoming an International Intermediary

If you're not ready to take the plunge into exporting your own products, Dennis Hessler has an alternative: Become an import/export intermediary.

The task of an intermediary, according to Hessler, is to help small and midsized businesses hook up with buyers and cope with issues like currency transfers and translations.

Hessler recommends finding a supplier first, then looking for a buyer. "If you already have a supplier, you'll have the information [a buyer needs]," says Hessler. "You can quote prices and know you can deliver 'x' container loads of widgets at 'x' price. You may be able to direct the buyer to the supplier's Web site to find out more about the product. You can even e-mail pictures of the products incredibly quickly and cheaply."

The key to success is discovering your "edge," which might be your knowledge of the market, the product or the target country. "If you're a shoe salesperson, use your contacts in the shoe industry to make your first sale," says Hessler. "If you have contacts in India, use them to find out what types of products sell in India, then find suppliers of those products in the U.S. Your edge gives you credibility, a clear connection the supplier can understand."

Hessler points out the importance of building relationships with suppliers and buyers. "Don't look at a trade as a one-time deal. Avoid 'fax-jockeying'-just faxing paper back and forth with no real dealings with the individual. It's better to build relationships with both sides, so everyone knows you-so you can count on them and they can count on you. Then your contacts can help you expand markets and product lines so you don't have to start over every time you put a new deal together.

"You don't have to sell 747s to make a lot of money as an intermediary," says Hessler, who notes that it usually takes about six months for that all-important first deal to come together. "Don't go crazy looking at the hundreds of buy/sell offers on the Internet and think you're going to get rich quick; build it up slowly. Patience is the challenge."

Resources


Moira Allen is the "Global" columnist for Entrepreneur magazine and editor of Global Writers' Ink, a newsletter for international writers. Her Web site for writers can be found at www.writing-world.com.