Flashback to 2006: I was flying high on the success of my direct-to-consumer U.S. e-commerce company, Ardis Health. Having just doubled my 2005 profits, I was on the fast track to once again doubling my business in 2006. At the time, I was focused on growing and managing my U.S. e-commerce operations. I hadn’t even entertained the idea of expanding my product distribution into international markets.
During a routine meeting later that year, one of my key manufacturers from the United Kingdom casually asked in passing, “Have you considered selling in Europe?” The idea sounded interesting and intriguing, but was it the right business decision? Did I have the time and resources needed to properly launch in a foreign market? What did I know about doing business in the UK when there was so much opportunity still in the US? These and other thoughts and doubts raced through my mind.
Fast forward to 2010. Today, I attribute more than 80 percent of my sales, revenues and growth from my business in Europe. In growing overseas, I had a lot of hits and a lot of missteps. Here are 10 invaluable tips I have learned about running a successful business outside of the US.
1) Partnerships: It is imperative to create strong, trusted partnerships with local vendors in the market you intend to do business in.
2) Banking: You must establish a relationship with a global bank that has locations in multiple markets and is able to process the various currencies you intend to work with.
3) Localization: US brands and products are popular throughout the world. However, when selling in a foreign market it is always good to tailor your messaging to that market. For example, copy on packaging, websites, marketing materials, and customer service communications must be not only in the local language, but also must take into account cultural differences.
4) Distribution: If you are in a consumer goods business you should identify what channels you want to use to distribute your products in the local markets. For instance, you might identify and use a local fulfillment center, or employ a knowledgeable expert that can either wholesale or license your brand to local retail outlets.
5) Legal: Each country has its own rules, laws and regulations. Before starting, you should seek out a law firm that is familiar with these laws as well as the do’s and don’ts about selling your product in the country. For example, I sell a teeth-whitening product. In the US, I am allowed to use 25 percent of the bleaching agent in my product, but in the UK, I am only permitted 5 percent. These are very important factors to know before you start to developing and selling your products in that market.
6) Business Hours: Because of the different time zones throughout the world, you may need to adjust your work schedule to accommodate working with your vendors and customers in their countries. As a small business, I have used tools like Skype to stay connected at a very low cost.
7) Currency Changes: In today’s volatile markets there are daily changes in the value of the world’s currencies against each other. Today, the GBP is about 50 percent stronger then the dollar. This can work both for and against you. If you are going to initially fund the start of your UK operations with US dollars, this means that you are getting 50 percent less value from your money. However, if you are able to bill in the local currency--pounds in this instance--you can gain a huge advantage.
8) Travel: Travel is very much a part of modern day business. And in business, people like to do business with people they like. Therefore, it will be imperative to make frequent trips to meet with your vendors and customers in their countries. You may want to study up on cultural differences in business etiquette, local customs and expect to try new foods, drinks and entertainment that you may not be accustomed to.
9) Risk: With all business there is risk. Without risk there is no reward. Expanding my product distribution internationally was a risk at first, but it was a risk that ultimately became an invaluable business decision. If I had not taken this risk, I would not have been able to enjoy the double-digit growth opportunities I have experienced in those markets.
10) Patience: As Americans we have a sense of urgency and want to get things done ASAP. However, when working in other countries and other cultures, this is not usually the norm. You must set out a game plan and with realistic expectations of what you want to accomplish within a reasonable timeline. Don’t give up! All the hard work will be worth it.