International business and trade is often an important part of a large organization’s strategy, but what if your small business is looking to take business overseas? Do you have the information you need to get started? Here are some important tips for expanding your small business internationally.
We’ve been hearing for years that the Internet makes it easy for even small businesses to go global, but just because you have an e-commerce site doesn’t mean you’re ready. You may find that it’s to your benefit to start small and expand to other regions as you gain more confidence. Make sure you can answer these questions, first:
Think through every aspect of your strategy before opening for international business. If your products require installation, local support or repairs, consider whether you will set up your own outpost or work with local partners for these services. Be sure to factor in their fees when calculating your projected profits.
Every country has different import and export regulations, and the regulations can be incredibly detailed and confusing. Getting one country or region running smoothly before expanding farther is probably an effective way to start. Research demand as well as local competition in various countries, and then choose the locations where you have the best chance of gaining market share.
Have your staff run through a “conference room pilot” where you test every aspect of the new process. Verify that orders come through accurately. Make sure the address fields in your underlying business systems can handle the varied formats of foreign addresses. Print some shipping labels and validate the formatting, and fill out a complete export documentation package to be certain you know how.
The import and export rules for every country differ, and many countries or products are subject to “denied party” regulations. This means that your local government prohibits you from shipping certain goods to specific countries. Check with the U.S. Customs agency, a third-party logistics partner (3PL) or a good customs broker before launching your new international sales arm.
You may think you know exactly the information required to ship your product, and you probably do — for your local region. You should validate the labeling requirements for the destination country — and any countries the shipment might go through on its way. You can do the research yourself, but the easiest and most cost effective way to manage this is to work with an experienced global-3PL provider.
Especially during the startup period, your costs may be higher than expected for international shipments. Not only will freight be higher than you are used to, there will also be customs fees, tariffs, brokers fees and other unforeseen expenses. A good 3PL can help you understand the fees required so you can budget appropriately.
International shipping is complex, and although you may be able to handle every aspect on your own, it will be more difficult than you think. Consider working with experienced partners, such as customs brokers or a global 3PL, at least in the beginning. Some small business owners shy away from bringing in support partners such as 3PLs because of the perceived expense. However, you may find that it is a more cost-effective path to follow.
Tom Krenning is Vice President of Operations and Account Management at Unyson. Tom is responsible for operational execution and excellence for Fortune 500 clients in manufacturing, retail and consumer packaged goods. He has more than 20 years of experience in progressive leadership positions at both Hub Group and Unyson.