www.bizstrat.com Business Strategies Magazine | May 2006 10 www.bizstrat.com

PROPELLING YOUR BUSINESS INTO THE GLOBAL MARKETPLACE

Going global is no longer an either/or proposition. Propelling your business globally could be as simple as setting up a Website to market your goods and services.

In the ever-changing and ever-fl attening world, in order to compete with your neighbors and competitors going global is no longer an option but a necessity. The world—of both information and goods—moves at a higher speed than it did even fi ve years ago.

By Robbi Hess

www.bizstrat.com Business Strategies Magazine | May 2006 11

Delaney Urges Business Owners to Take These Factors Into Consideration Before Going Global:

• GET COMPANY COMMITMENT.

• DEFINE YOUR BUSINESS PLAN FOR ACCESSING

GLOBAL MARKETS.

• DETERMINE HOW MUCH YOU CAN AFFORD TO INVEST.

• PLAN AT LEAST A TWO-YEAR LEAD-TIME FOR WORLD

MARKET PENETRATION.

• BUILD A WEBSITE AND IMPLEMENT YOUR INTERNATIONAL

PLAN SENSIBLY.

• PICK A PRODUCT OR SERVICE TO TAKE OVERSEAS.

• CONDUCT MARKET RESEARCH TO IDENTIFY YOUR PRIME

TARGET MARKETS.

• SEARCH OUT THE DATA YOU NEED TO PREDICT HOW YOUR

PRODUCT WILL FARE.

• PREPARE YOUR PRODUCT FOR EXPORT.

• FIND CROSS-BORDER CUSTOMERS.

• ESTABLISH A DIRECT OR INDIRECT METHOD OF EXPORT.

• HIRE A GOOD LAWYER, SAVVY BANKER, KNOWLEDGEABLE

ACCOUNTING, AND SEASONED TRANSPORT SPECIALIST.

• PREPARE PRICING AND DETERMINE LANDED COSTS.

• SET UP TERMS, CONDITIONS, AND OTHER FINANCING

OPTIONS.

• BRUSH UP ON DOCUMENTATION AND EXPORT LICENSING

PROCEDURES.

• IMPLEMENT AN EXTRAORDINARY AFTER-SALES

SERVICE PLAN.

• MAKE PERSONAL CONTACT WITH YOUR NEW TARGETS.

• INVESTIGATE INTERNATIONAL BUSINESS TRAVEL TIPS.

• EXPLORE CROSS-BORDER ALLIANCES AND PARTNERSHIPS.

• ENJOY THE JOURNEY.

Why Go Global?In her manifesto “Shaking Things Up. Making Things

Why Go Global?In her manifesto “Shaking Things Up. Making Things

Why Go Global?Happen,” Chicago-based Laurel Delaney, founder and CEO of GlobeTrade.com writes, “In the future, there will be two kinds of GlobeTrade.com writes, “In the future, there will be two kinds of GlobeTrade.comenterprises: those that go global and those that die.”

Companies should be going global, Bill Graff, director of the Rochester Business Alliance’s International Business Council says. “It makes sense to look at the international opportunities

that are out there. If 95 percent of your customers live outside of the United States and if you aren’t catering to them, you are tossing away a large potential customer base.”

Delaney says, “After Thomas Friedman’s World Is Flat book came out, it was the Flat book came out, it was the Flatfi rst time we’ve really had main-stream America understanding the ramifi cations of globaliza-tion. It’s almost as if you don’t consider reaching out and looking at the world as your marketplace, you won’t be competitive. It’s a radically different world now. The Internet has exploded and expanded the opportunities and you should be out there hard-charging to gain a foot-hold.”

As someone who has been in international trade for 13 years, Laurie Ritter, export manager at Newtex Industries—

as well as owner of Export Compliance Council—explains that a company may be content with the market share it has in the United States and associated revenues.

“But once a product becomes mature in the U.S. market, going global allows a company to either reposition its product or introduce the same product into new geographical areas. Global trade opens business opportunities, new product development, and new customers.”

“Unless you offer a unique, niche product, it’s a necessity to look beyond your own backyard in order to remain competitive,” Ritter adds.

At some point someone involved in the same industry as you are will fi nd out how to compete in the global marketplace and will start snatching up your customers, according Delaney.

“Today, companies in the U.S. fi nd themselves competing with companies outside of this country for business.”

“If 95 percent of your

customers live outside of

the United States and if

you aren’t catering to

them, you are tossing

away a large potential

customer base.”

– Bill Graff, Director, Rochester

Business Alliance’s International

Business Council

www.bizstrat.com Business Strategies Magazine | May 2006 12

Did You Know?THERE ARE MORE THAN

230,000 SMALL BUSINESSES

EXPORTING IN THE UNITED

STATES ALONE.

THE NUMBER OF SMALL

BUSINESS EXPORTERS ROSE

250% FROM 1987 TO 2001.

ABOUT ONE OF EVERY FIVE

U.S. FACTORY JOBS DEPENDS

ON EXPORTS.

EXPORTS MEAN NEW

CUSTOMERS AND MORE THAN

95% OF THE WORLD’S

CONSUMERS LIVE OUTSIDE

THE UNITED STATES.

SMALL BUSINESSES WITH

FEWER THAN 500 EMPLOYEES

EXPORT ROUGHLY 182 USD

BILLION ANNUALLY, OR 29%

OF ALL EXPORTS.

From Here to There

While Delaney believes that compa-nies must go global, she also recognizes that some companies may not lend them-selves to that level of production. “If you are a mom-and-pop organization making jams and jellies in your kitchen, you could certainly sell a jar or two globally but you might not have the resources, or desire, to compete on a larger scale,” she explains. She adds though, that with e-bay, many individuals are fi nding it much easier to sell products—whether one jar of jam, homemade items, or other products—on a global scale. “I am a fan of eBay for a small-business person selling their wares but I am not a fan of it being used as a model of going global when it comes to talking about selling a single item to a single customer in a foreign country. True globalization means that an organization is selling a large volume to a wide variety of customers across interna-tional borders.”

A Website, Delaney says, is the fi rst step in moving a business out of the local market to the international one. After that she suggests checking out govern-mental resources such as www.buyusa.govwhich offers myriad information and tips.

“You don’t have to do business in your own backyard,” Delaney states. “The world is your new marketplace. And the technology that we have available to us now is the ramp to launch your business to the next level.”

Ritter adds that once Newtex had its Website operational, business “found” them.

Before going international, Ritter cautions businesses to research what’s involved and to know their own limita-tions and restrictions: U.S. export regula-tions; pricing differences in both cost and currency exchanges; units of measure (kilos vs. pounds, etc.); payment terms, patents, language barriers; customs when visiting or in marketing materials (e.g. the number 4 in China is bad luck);

and dealing with distributors, agents, and direct salesmen are all issues that may have to be addressed when exploring the global arena.

Filling a need or fi nding a niche may be the way to propel a business into the global arena, Graff explains, adding that Web commerce makes sense if you are offering goods or products that are industry-specifi c.

Is It For EveryBusiness?

EveryBusiness?

Every?

It’s a matter of products and attitude, Graff says. “We have companies that do a tremendous amount of business over-seas—competing globally isn’t contingent on company size. It’s a matter of fi nding out whether it makes sense for you. Due diligence must be undertaken to under-stand the potential markets, benefi ts, and pitfalls before taking your goods to market.”

The United States Department of Commerce’s export assistance center in Rochester, Graff says, is an excellent starting point. “They have access to market data that can help you determine if you can compete globally and make it fi nan-cially viable.”

Sometimes people have a short-sighted view and think they can’t compete globally. Graff says that likely isn’t true.

“It depends on where you fall on the value chain of price versus cost. Companies need to provide not only low cost but a best value solution.”

Are you going to blanket the globe with your products? Are you planning to target specifi c international markets? Those are questions a business must research as it explores business beyond its borders. “Look at your core competencies and go from there,” he advises.

Businesses wanting to go global need to be open to new practices, says Ritter.

“Global trade is not textbook in university teaching. In my experience, businesses cannot take for granted the importance of

www.bizstrat.com Business Strategies Magazine | May 2006 13

“The Internet has exploded and expanded the

opportunities and you should be out there

hard-charging to gain a foothold.”

–Laurel Delaney, Founder and CEO, GlobalTrade.com

knowing their products and how they relate to Export Admin-istration Regulations (EARs).”

Also, she says, alternative payment options may need to be explored. Gone are the days of cash in advance and net 30.

“Contract negotiations can take months or years, depending on project size and could involve numerous overseas trips, meet-ings, and yes, unexpected expenses. Relationship building is important for customer loyalty in overseas markets.”

Going global involves importing as well as exporting as global sourcing is used to help lower production costs or source products not available in the U.S.

Rochester Poised For the Global Market

Rochester is in a unique position, Graff says. “We are very heavily involved in a community that embraces international business; I think that goes back to Kodak and Xerox. Another shift we’ve seen is that small to mid-sized businesses have made international businesses a signifi cant part of their revenue streams.”BSM