Three Golden Rules for Exporting - and a bonus rule we should all follow
Exporting can bring solid business growth but it has to be the right opportunity at the right time for your company to benefit
The world of international trade has always been a complex arena where players will consistently face challenges they may not have expected, situations that could never have been predicted and yet still need to ensure their activities will return a profit. It is a world of regulations, inspections, certifications, insurances, specialized process and more. Certainly there is a great deal to know about the world of global trade, but at its core international trade has its foundations in three rules...and a fourth that may seem common sense but often escapes most people's grasp.
You have to have it going on at home.
Let's start simple - you have to have your business in business. When you have it going on at home, you are an active successful business. Your accounts receivable are in good order, payments are being made, production or service delivery is sound (sure there are always issues) but the general state of your business is sound.
Global Trade Will Not Solve Your Problems
If your business is not sound and you think finding customers in a new country or across your home country will be the difference maker, I have some bad news for you. Exporting is not the answer to your problems, it will only add new problems exponentially complicating your business activities. Now don't get me wrong, some business were built with the specific purpose of exporting. But if your business has been operating in a local market, or only operates domestically within a small region, make sure things are in good order. Your going to need to start from a solid position to succeed in global markets.
You have to have excess capacity.
If you cannot make more, or provide more services, you cannot sell more. I know you are probably thinking I am a complete fool when I say this but it is so true.
You've got to be able to deliver
I have seen too many times companies enter new markets only to find out they cannot meet the orders they get. Service companies are prone to this in that they cannot meet client expectations because they don't have the capacity (human resources or other supports) to deliver on a contract resulting from their foray into global markets. Going global generally means you will come across customers looking for your product or service and you have to ensure you can supply them before you get to far into negotiations. Can you get the raw materials you need, are your suppliers ready to support your growth, do you have the talent and time needed to deliver your services? Can you ship to your new customers? Do you need any new certifications or inspections? Finding new business is the ultimate goal of international trade, but you have to be able to deliver.
You have to be committed to the effort.
There are going to be good times and bad times as you venture into global business. What is always the difference maker is the commitment level each firm brings to the effort.
For every reward there is a risk
International trade is full of challenges. You've researched the market, understand the culture, modified your product to suit local needs, your suppliers are lined up, your freight forwarder is good-to-go, customs brokerage is lined up, local distribution is all set...and then it all falls apart because a local new government regulation changes how products like yours are to be sold. Just like any other part of your business, anything can happen and usually does, at the worst time. If your first reaction is to throw in the towel, then you are prepared for what global trade will throw at you. Commitment, both personally and financially, is required to ultimately succeed. But it's the personal commitment that is most important. My advice when challenging situations arise - improvise, adapt and overcome. It's not the end of the world; take stock, look for options and see what else can be done. But don't give up...the rewards can be worth it!
Bonus Rule #4
People generally do business with people they like.
Just as in everyday life, treat people how you want to be treated. The difference with international trade is you need to know how people like to be treated.
Your culture isn't the only one
If you haven't travelled much I have some news for you. People's tastes, actions and traditions are not the same in every country around the world. "I'm not stupid, I know that," you say. Again, I have been amazed by the total lack of cultural understanding and awareness displayed by companies who venture into far off lands to sell their goods and services. When you are the seller, it is totally your responsibility to learn how the culture you are selling into acts. What are their tastes? How should I greet people? How do I give my business card? When do they prefer to meet? How are meetings conducted? Do I need a translator? What if they don't buy on the first meeting? How do I follow up? And so it goes. Get to know the people you want to see to, even in general terms at the start, and then get to know them personally as your relationship grows. But take the time to understand different cultures. You will come across more likeable from the start. And that's better than most!