The Road Less Traveled
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When you're looking to go international, industrialized nations shouldn't always be your first choice. Have you considered developing countries?
More than half the world's population is scattered across the 100-plus economically maturing nations within Africa, Asia and Latin America. Many of these areas have strong middle classes, controlled inflation and adequate infrastructures.
"Opportunities are very good in those areas," confirms Harry Brandon, co-founder with Gene M. Smith of Smith Brandon International, an international trade consulting firm in Washington, DC. "The standard of living is improving. People are starting to have the ability to reach out for the services and products [the United States has] to offer."
The process is far from effortless, however: Relationships take longer to develop, and businesses in these countries rarely commit to your terms unless they're certain they can meet them. They also may be unable to respond to sudden increases in product demand, due to frequent lapses in electrical power or unreliable transportation. And of course, fax and phone lines are often nonfunctional.
Entrepreneurs sometimes fear doing business in these areas (Colombia has a reputation for drug-trafficking and terrorism, for instance), but overall, the benefits outweigh the drawbacks. It's not hard to familiarize yourself with an area like Latin America--its huge population shares similar cultures and languages. And these nations also have "an infatuation with American products and American culture," says Smith.
Just make sure to enlist the expertise of a third party to help you. That's what Jay Duffy did: As co-founder with his brother, Mike, of Cascade Clear Water Co., a bottled water manufacturer in Burlington, Washington, Jay paired up with a market-savvy expert to help with overseas negotiations. Now he's drinking to success with profitable relationships in Taiwan, Indonesia and the Philippines. "For me," Jay says, "we really couldn't be doing business without him."
Make No Mistake
The moment you've hoped for has finally arrived, and you're ready to export your product. Now what?
Your first order of business: Take heed of the hard lessons learned by those who have gone before you. Many have blundered, but that doesn't mean you have to. Below are some of the most common exporting mistakes, according to John E. Cleek, director of the Center for International Business at the Bloch School of Business at the Unversity of Missouri in Kansas City.
- Failing to plan your strategy. "Small businesses are particularly vulnerable to this problem, but larger ones are often guilty of the same mistake," says Cleek. "It takes far more time to extract yourself from problems created by lack of planning than it would to do it right the first time."
- Chasing inquiries the world over. Just because dozens of countries show interest doesn't mean you're ready to market your product everywhere. Patience is key. "It takes discipline to respond to an inquiry from a country about which you know very little," Cleek says.
- Assuming if it works in America, it will work anywhere. Not true--you need to tailor your sales and marketing efforts to each country. Don't ignore the cultural differences shaping the marketplace. The same goes for pricing, shipping, payment terms and packaging.
- Assuming business will be done in English. Familiarize yourself with the local language. Says Cleek, "It is the height of ignorance to expect other people to learn our language in order to buy from us."
Cascade Clear Water Co., (360) 757-4441, fax: (360) 757-3534
Smith Brandon International, (202) 434-8790, fax: (202) 393-7719