How to Know Your Business is Ready to Expand Internationally
May 22, 2024
By Alex Viva, Director of SBTDC’s International Business Team
Before doing the “fun part,” do your homework.
“This is the fun part.” That’s how a moderator for a recent export training course I attended started his session. The “fun part” he was talking about at the event: traveling to foreign markets and making connections. Instantly, I remembered being a child again, instructed to complete my homework before going outside to play. Going into international markets should follow the same pattern.
The Four Cornerstones of International Business
So before we go out and play, let’s do our homework. The SBTDC’s International Business Team is extremely knowledgeable of the four cornerstones of international business: Management Commitment, Product Knowledge, Financial Capabilities and Operational Capacities. Each has its own details, but all must be reviewed holistically. A company may have a good grasp on a couple of these, but if one is lacking, then the company is not ready to expand into international markets.
Management Commitment
Without commitment we have only a dream. Payback period, market incentives, capital expenditures, resource allocation, future staffing decisions should all be agreed upon. Will decision-making be centralized? What is the management’s attitude toward risk and failure? Where is your focus?
Product Knowledge
Is there a market for your products? Detailed demographic of users, competitive advantage, most effective distribution strategy, role of the products in value chain should all be well-known by all involved. Does your product/service require support or maintenance? What price will be competitive?
Financial Capacity
Adequate cash flow, working capital; it may take a while before success in export markets. Does your strategy fit with resources available? Will you need immediate entry, or can you have slow development into foreign markets? Direct vs. indirect entry: who is going to run the show and how will that look on your financial statements?
Operational Capabilities
Do you have the capacity and capability to produce exportable products? What will be the impact if sales increase by 10, 20, 30%? What is the response or turn-around time? Are there challenges to the system when tracking domestic vs. export sales? Is it necessary to make technical modifications or perhaps re-design products for exporting? What about training and documentation?
Why work with NC SBTDC for International Business?
1. Export Readiness Assessment
Before venturing into international markets, it’s essential for businesses to assess their readiness and capabilities – do your homework. NC SBTDC offers export readiness assessments to help businesses evaluate their strengths, weaknesses, and readiness to engage in international trade. This assessment helps businesses identify areas for improvement and develop tailored strategies for success in global markets.
2. Expert Guidance and Support
Navigating the complexities of global trade requires specialized knowledge and expertise. Our IB Counselors are well-versed in global business practices, regulations, and market trends. They provide personalized guidance and support to help businesses develop effective strategies taking into account the cornerstones discussed above.
3. Market Research and Analysis
Understanding the dynamics of foreign markets is crucial to success. NC SBTDC offers comprehensive market research and analysis services to help businesses identify promising opportunities, assess market demand, and evaluate competition. This invaluable insight enables businesses to make informed decisions and tailor their products or services to meet the needs of international customers.
4. Access to funding and Resources
Financing is often a major challenge for businesses looking to expand internationally. NC SBTDC helps businesses with detailed analysis to explore financing options, including government programs, grants, and loans, to support their international growth initiatives. Additionally, NC SBTDC provides access to a wide range of resources, including trade missions, workshops, and networking events, to help businesses connect with potential partners, suppliers, and customers abroad.
5. Regulatory Compliance and Risk Management
Navigating the regulatory landscape of foreign markets can be complex and challenging. NC SBTDC advisors provide guidance on regulatory compliance, export documentation, customs procedures, and risk management strategies to help businesses minimize potential pitfalls and ensure compliance with applicable laws and regulations.
In an increasingly interconnected world, businesses of all sizes are expanding their horizons beyond domestic borders to tap into the vast opportunities offered by international markets. However, navigating the complexities of global business can be daunting, especially for small and medium-sized enterprises (SMEs) with limited resources and expertise. This is where organizations like the North Carolina Small Business and Technology Development Center (NC SBTDC) step in, offering invaluable support and guidance to businesses venturing into international territories. We help you do your homework so that you and your business can get to the fun part.
