The following is an interview that was conducted by GrowBiz Media with me, Laurel Delaney in July 2012. I spoke with GrowBiz Media about how starting a business today means starting out global (importing and exporting) since anyone in the world who has an Internet connection can access a website.
GBM: Are you really going to turn down a sale because you can’t ship overseas?
LJD: Yes! That’s like asking, ‘are you really going to turn down skydiving because you don’t know what you are doing or what precaution to take when diving out of a plane?’ Absolutely. But can I learn how to skydive so that I minimize my risks and can enjoy the experience? You bet. And that’s exactly the mindset someone must take to sell overseas. You choose to import and export (go global). Do your homework. And take action when you are confident you know what you are doing.
GBM: Do you think there’s any reason today why a start-up can’t immediately consider selling overseas?
LJD: Yes, there are a couple of outlier reasons, which are as follows and in no particular order of importance.
• The business owner does not know how to do business internationally.
• The type of business doesn’t lend itself to going global. For example, a hair salon, health care or dry cleaning service would be hard-pressed to export. At some point though these business owners can offer their intellectual capital to other businesses located overseas that are interested in starting these types of businesses and that would be considered a “service export.” You are offering your business brainpower to someone located in another country to start-up a business similar to your own.
• Some business owners think they can franchise an idea right out of the gate on an international basis but this typically does not occur at start-up.
• The demand is so great locally that the organization must focus on the business at hand rather than jump into the overseas market right away and take a chance at messing up the local market.
GB: What advice do you have for start-ups looking to sell their products overseas?
LJD: Do your homework. Be flexible. Find out everything you can about the country where you wish to conduct business. Don’t dive in headfirst, only to discover later on that you have entered shallow water and have taken your eye off the local business at hand. Wait until you have a good handle on your capabilities, know who your customers are and have learned how best to service the needs of those customers. Create a history of successes that prove your business model works before you reach out to do business with the world. Once that happens, you can transfer the knowledge and skill set to just about any place in the world, provided there is a need and demand for your product or service. But again, it gets back to the “doing your homework” part mentioned early on. You must know how to go global before you can go global. Oh, and the flexible part, I can’t tell you how important that is when you enter new markets. You never know what is going to happen so, yes, have a plan but also be flexible should you have to steer in a new direction at any given moment.
GBM: What are some common mistakes start-ups make when selling globally?
LJD: They move too soon and fast–a knee-jerk reaction as opposed to executing on a well thought out and crafted strategy. They divert attention to the overseas market to the detriment of their local business. They are understaffed to take on the overseas market–long on dreaming to go global but short on capabilities. They start in a complex market (e.g., where there is a lot of red tape or the natives speak a different language) or open up negotiations with the wrong party (e.g., someone who is untrustworthy or a bad fit). They are too quick to execute on a sale and fail to secure a guaranteed payment. They act too fast and aggressive in providing online banking information to get paid or to pay a supplier, only to find later on that they have been cyber attacked on their bank account. They don’t state clearly on their website or blog whether they accept international sales orders. If they don’t, they should say so. If they do, then they should state specifically which countries they serve and follow through accordingly when inquiries roll in.
GBM: What are the hot markets today?
LJD: It depends on what you are selling. If you are selling luxury items with international prestige, developing Asian countries, such as China and India are the go-to-markets. If you are selling automotive parts, China, Japan and South Korea are good bets. For chemicals and pharmaceuticals, try Brazil. It all goes back to doing your homework.
The original article can be found here: “Taking Your Startup Global” (http://readwrite.com/2012/07/23/taking-your-startup-global).