While international trade has been tempestuous of late, the movement of goods and increasingly, services across borders and overseas is essential to the functioning of the global economic system. For a small business, having access to an international market brings a much larger market and the potential to develop an economy of scale but many logistical challenges as well.
If you are running a small business and are seeking to make your mark on the international scene, then you need to consider the sequence of events that needs to come before you pack up your first shipment for export. The more planning you do ahead of time, the less likely it will be that you suffer a catastrophic loss or run afoul of legal requirements in Australia see the ABN guide for small business or abroad.
To provide you with some initial advice, let’s look at some specific steps to take before going global as a small business.
Do Extensive Market Research
Before going to the trouble of setting your business up for scale, make sure to explore the market opportunities for your goods and services in your target markets. While your products might be hot commodities in your domestic market, many factors play into the success and failure of products when they hit the scene in a new country.
For one, you need to be aware of local competitors in the country where you want to export. If you make the mistake of shipping your goods to a place where products just like yours are made for half the price, then you will be unlikely to be an overnight success in this new market.
Even if your products have no local competitors, you still need to ensure that a large segment of the local population will be able and willing to purchase your products. This might involve a little research into local purchasing power and exploring what the actual cost of your products will be for consumers when they go to buy them and accounting for any additional charges like tariffs or taxes that are passed on to the consumer.
Be Ready To Scale Up Your Staff
Depending on the precise nature of your business, going global will put significant strain on your existing human and physical capital. Unless you have the means to rapidly put new machinery into place or to hire talented staff quickly, it is important to consider this step early on.
Do some quick calculations to determine what changes you will need to make to meet the production or service levels that you anticipate will arrive when you start to go global. If your plans for expansion are well-conceived, it makes a lot of sense to start investing in these assets sooner rather than later.
Comply With Local Legislation
Many articles highlight the importance of staying up to date with legal requirements in countries you are targeting for expansion. Make sure that you also contact the appropriate Australian governmental bodies to ensure that you are complying with all of the necessary domestic legislation that covers your exports. Do this early on to avoid putting your time and energy into a pursuit that will ultimately break the law and be impossible to fulfill.
Make The Most Of It
Once you have a solid sense of how your business will make the transition to the global market, then make the most of every opportunity to take your business as far as you can. If you have done your homework, you will find that tremendous opportunities await entrepreneurs who are willing to take this step.