There’s no doubt about it: Business has gone international. New electronic and logistical technologies have narrowed distance and time, and trade agreements have opened markets. And manufacturers are in a good position to venture into the business of exporting.
Fluctuating currency-exchange rates and other challenges can make going global a challenge, but there are many benefits to consider, including:
1. Boosting revenue. A larger market base and new demand from various niches can not only increase your sales, it can offer economies of scale, letting you get more from your resources.
2. Expanding profits. Earnings can rise quickly if you are able to cover fixed costs through your company’s domestic operations.
3. Economic protection. Diversification can buffer the damage you might suffer during a domestic economic turn down.
4. Bolstered competitiveness. Global success can boost your company’s competitive edge by giving you new ideas and marketing techniques to use in the U.S. It can also help when faced with foreign competition in the domestic market.
These multiple benefits aside, venturing into the global marketplace can test your abilities and resolve. Among the challenges you might face:
- Increased outlays. As with any new venture, you will be spending on extra travel, new marketing and packaging materials and additional staff. Most of these outlays are in the short-term.
- Stamina and patience. You and your staff will need to be committed to the project and willing to expend the time, effort and resources to establish yourself in the new market. You may have to wait months or even years before the investment starts to pay off significantly.
- Competition. You can’t just walk into a foreign market. It takes time and money to find the right target and become fluent in how it operates. And to remain competitive, you must be easily available to your clients and familiar with differences in language, culture and business practices. Otherwise, you run the risk of offending potential customers.
- Bureaucratic headaches. Be prepared for piles of paper. All countries, including the U.S., require massive export documentation.
Still interested? After considering the pros and cons of an export venture, it’s time to assess your resources and commitment. In a future article, we’ll discuss the evaluation process.