This is the second of three installments of an interview with export consultant Laurel Delaney in which she gives advice to small business owners and discusses the growth and challenges of the import-export industry.
What are some of the obstacles to importing and exporting?
According to a UPS Business Monitor United States Report, the top ten obstacles for small businesses are (with my comments after each):
1. Seems too risky. Is it worth the risk to not go global and be swallowed up by your competitors who serve the world? Taking a business global requires a great deal of due diligence at the outset to minimize any possibility of risk. That said, do an upfront analysis of your local success and use that as a basis for moving ahead one country at a time.
2. Lack of knowledge about international markets. A lot of companies seem to be operating in a cave. With the Internet, there is just no excuse for not being able to find the information you need to move forward on importing and exporting (Just look at this site!).
3. Does not apply to my business/no need. If you operate myopically, you will tune out big potential for your business. Some people love lobster, others don’t. And the funny thing, those folks who love lobster can’t understand why others don’t. The same holds true for going global. Those who go global can’t understand how others limit their growth potential by not.
4. Unfamiliar with customs, regulations and laws. Like any new endeavor, there is a short learning curve and after that, you’re well on your way to making progress. The trick is to continuously ask questions of those people who have the answers. In this case, talk to transportation experts, and regarding specific intellectual property issues, consult with an international lawyer.
5. Do business locally/do not deal outside the United States. Most businesses, if not all, start out locally but grow beyond their own backyard. Where do you aspire to be: crossing borders with your product or service offering or merely selling the guy across the street?
6. Not interested/focused on local market. Attitude is everything. Without a global mindset and a can-do attitude, doing business with the world is an impossible feat. That’s why I tell people to look beyond their own geographic area for business. Explore!
7. Language barriers. If you don’t speak French, don’t go to market in France first. It’s as simple as that. Why complicate things? If English is your native tongue, start selling to the U.K., Ireland and Australia. When you become successful selling a few different countries, expand to a new market when you are ready for the challenge: France!
8. High cost associated with expansion. If you haven’t done it, how do you know there is a high cost to international expansion? Don’t let what others say get in the way of your decision. Test the waters. Take a small order first and see if you can finance the sale in a way that is manageable. Consult with your banker. Most are eager to work with you to get the business and see you grow.
9. Lack of opportunity/market/profit. Shortsightedness gets you nowhere. Open your mind to the possibilities that importing and exporting offer, and watch your revenue and profits soar.
10. Product or service offering only suitable for the local market. Have you thought about tweaking your product or service offering to accommodate a wider audience? Say you sell homegrown strawberries in Michigan. It might be complicated (although possible by air) to export your strawberries worldwide, but have you considered making strawberry jam in volume? You could vacuum-pack, get a nice long shelf life and ship all over the world. Think creatively!
What economic, political or other forces have led to the strong growth of the past decade?
Take a look at this report — "Phase Three: The New Entrepreneurial Economy" — because the global marketplace is a large part of it.
Highlights are as follows:
• One world, one market: U.S. small businesses will serve international markets almost as easily as their local customers. Similarly, foreign entrepreneurs will increasingly enter the U.S. market.
• Global networking: Professional and social networks, both online and offline, will mute soft trade barriers, such as language and cultural differences, and fuel cross-border trade.
• Immigrant insights: Entrepreneurs with foreign market knowledge and unique cultural perspectives will be better able to identify and customize products for new and previously undefined market niches.
And revisit the four drivers mentioned in the first installment of this series: the flattening of our world through the global Internet (Friedman, 2005), technology, newfound interest in globalization and fears of how to thrive, not just survive in a very competitive global environment. They play a huge part in the growth curve.
Be sure to read Part 1 of 3.