Doing Business Globally
Thousands of small businesses, which account for 99.7 percent of all employers (according to 2011 U.S. Census data) in the United States, export products and services to other countries. According to the U.S. Trade Commission in 2012, small and mid-size businesses comprised nearly 98 percent of U.S. companies in the international trade arena. In fact, they accounted for 33 percent of goods exports. They are doing business globally.
As the Internet and social media continue to bolster our ability to collaborate with others across the globe, it’s not a stretch to predict more small businesses will embrace the opportunities to reach customers beyond the U.S.
Small businesses have opportunities to grow and thrive in a large, diverse global market. According to the Export.gov website*, 96 percent of consumers and two-thirds of the world’s purchasing power comes from outside of the United States. Doing business internationally offers advantages operationally and competitively via the potential to increase revenue and gain some protection from fluctuations in domestic markets.
That doesn’t mean doing business globally is easy, though. Entering markets in other nations requires attention to details you may not have had to concern yourself with before.
In addition to its many opportunities, doing business overseas poses some risks and obstacles.
- Issues in getting paid
- Protection of Intellectual Property Rights (IPR)
- Corporate income tax in certain countries (Some charge extra taxes upon receiving goods.)
- Lofty shipping costs and unreliable postal services in other countries
- Trust issues with the partners or agents you’re working with
- Cultural expectations when conducting business
- Rules, restrictions, and license requirements of destination countries when shipping products
- Language barriers (e.g., in marketing materials, avoiding words and terms that may be unfamiliar or inappropriate for other cultures)
For additional insight about doing business globally, you can tap these resources that specialize in providing information and programs in support of international trade:
- SBA’s Office of International Trade—This office works with other federal agencies and public and private groups to encourage export opportunities for small businesses.
- S. State Department’s Direct Line to American Business program—This program gives small businesses direct access to U.S. Ambassadors, mission teams, and foreign government officials to explore market opportunities in their respective countries. The State Department also provides the Business Information Database System (BIDS), a portal to help U.S. businesses learn about international projects that may offer commercial opportunities.
- S. Commercial Service’s Gold Key Matching Service—This service can help small businesses find potential overseas business partners, agents, distributors, and sales representatives.
- gov’s links to information about doing business in specific countries—These links offer insight and data about various countries’ cultures, business climates, market research, service providers, trade events, and other information. The breadth of information available varies from country to country.
Doing business globally is not just an opportunity—it is a must if you want to maximize the potential of your business.
The Coachella Valley SCORE Chapter has many qualified mentors that can help you expand your business globally. Call today for an appointment with a SCORE mentor (760-773-6507). There is never any charge for SCORE mentoring!
*Accessed April 11, 2016