With 95% of the world’s consumers located outside of U.S. borders, there are strong arguments to incorporate international sales into your company’s growth strategy, but how do you know when you are ready? In this article, we walk through the questions to ask yourself to determine if you are prepared for a successful international business expansion.
Intellectual property (IP) is the foundation of your business; therefore, it is important to protect your IP to enhance your competitive advantage both at home and abroad. Evaluating your IP portfolio, taking the steps to protect your IP, and understanding the IP registration requirements in potential target markets are good first steps in determining your company’s export readiness.
It can take up to 18-24 months to properly develop a new export market and realize sales. Having management’s support to develop and implement an export strategy will ensure sufficient company resources are committed to the effort. Additionally, those companies whose founder or C-suite executives have previous international sales experience can leverage this knowledge and shorten the learning curve.
Companies that have a product or service that has been successful in the U.S. market are generally well positioned to explore international market opportunities. Thorough market research will help you find the right target market for your product/service. This can include an analysis of the competitive environment, cultural considerations, legal and regulatory frameworks, and examining the political and economic conditions in an export market.
When assessing operational capacity, determine if your company can scale its operations to deliver a reliable customer experience. This could include modifying a product/service to comply with international standards, regulations, or cultural norms, adding manufacturing capacity to meet increased demand, and optimizing shipping and distribution processes to address the complexities of exporting.
Additional financial resources will be needed for international market development such as translating marketing materials, traveling to target markets to meet with potential partners, or participating in trade shows or trade missions. Available trade finance tools can help you prepare for international business and to mitigate risks. Companies with an understanding of the different payment methods as well as a strong financial balance sheet are better equipped to weather the inevitable costs and risks of entering new markets.
Exporting opens a whole new growth channel but requires companies to take measures to remain in compliance with regulations. The U.S. Government controls the export of some commodities, software and technologies, where U.S. companies can export, and to whom. Understanding U.S. export regulations, due diligence requirements, and prevailing reporting and documentation requirements, such as the import regulations for prospective target markets is an important aspect of a company’s export readiness assessment.
While this list is not exhaustive, it provides a framework to assess your company’s readiness to develop an export business plan. To prepare for eventual international sales, use your time to attend export training programs and build your network of contacts within the export ecosystem. If you are interested in learning more and developing your international business strategy, contact LeeAnne.Haworth@trade.gov to learn about upcoming training programs.
LeeAnne Haworth is a Senior International Trade Specialist with the U.S. Commercial Service Pittsburgh Office and can be reached at LeeAnne.Haworth@trade.gov or (412) 644-2816.