Want to expand your business overseas? Becoming an international company could allow you to increase your customer base and make a bigger profit. Thanks to the internet, connecting with these foreign clients is easier than ever. That said, there are a few challenges to serving customers from other countries. Here are just a few major challenges to be wary of and how you can overcome them.
A different market
Whilst you’re likely to have a good understanding of your local market, the market abroad can be very different. Customers may have different needs and desires, which could mean having to alter your product or change the way you market it.
First, you need to definitely ensure that there is a need for your product. You may find it hard marketing domestic air conditioning units to Norway – it’s so cold most of the year round that few homeowners are really going to have a need for it. In other countries, certain mid-range products may have less of an appeal if there’s more of a divide between poor and rich – the poor won’t be able to afford it and the rich may be more likely to opt for something luxury.
In other cases, you may get lucky and identify a hole in the market that hasn’t been exploited yet. With less competition you may be able to broaden your marketing and make your message simpler.
You should start by launching a market research campaign. This could involve reading up books, research local competitors and possibly hiring advisors to help you understand the state of the foreign market.
The cost of travel/delivery
There could be extra associated costs with conducting business abroad such as travel costs or delivery costs. These could be worth budgeting and researching before you start accepting business abroad.
Travelling abroad for instance could require forking out money on flights and hotels. Whilst you may be able to opt for a budget airline and cheap hotel, you’ll likely not want to skimp out on quality too much if you’re sending employees over. Making use of air mile discounts or hotel membership points could help you to make savings. Alternatively, there may be times when you don’t need to travel at all – whilst it may not have the glamour of getting on a plane, videoconferencing makes better business sense in many occasions and it can even be used to give tours or seminars.
As for delivering products abroad, you’ll likely have to pay extra for shipping. This is a cost that you can charge the customer for, however there may be times when you need to pay some of the cost. Shipping by sea is likely to be less costly by air, however it’s slower and this slow delivery method could put off some customers. You should look into international courier services to find the cheapest option.
The currency exchange
You’ll also need to consider the currency exchange when trading abroad. This could affect how you price items and how much profit you make.
Firstly, you’ll need to ensure that you can accept foreign payments. Many popular payment gateways like PayPal accept multiple currencies and could be a good platform to use. You may also want to look into cryptocurrency – a growing number of people now use crypto for foreign trade, allowing both parties to use the same value currency rather than factoring in fluctuating currency rates.
It’s possible to make the prices on your site automatically convert depending on where customers are visiting from. If you’re giving individual quotes to customers, you may simply have to keep on top of currency values so that you’re charging customers the right amount.
Be wary that different VAT rules may apply when selling in different countries. Getting help from an accountant that specialises in international trade could be necessary so that you’re filing the right amount of tax.
The language barrier
English is widely spoken around the world and in many cases it is seen as the language of business. However, there may still be some countries in which customers don’t speak English well. This could mean having to negotiate a language barrier in order to win over these customers.
Nowadays, there are tools that can automatically translate websites, however these aren’t always 100% accurate. You may want to hire a translator to rewrite a version of your site in another language for customers from a certain country so that there aren’t any translation errors. As for phone conversations and in-person meetings, you may want to hire an interpreter so that you can more clearly communicate your ideas to clients.
There may be other elements of marketing that need to be translated too. For instance, you may have to look into video captioning services for translating promotional videos. PPC ads may also need to be translated.
The time difference
The time difference could also be something to factor in. Whilst some American business owners may already be used to dealing with different times in different states, there could be an even greater difference when conducting business abroad.
This could mean having to communicate with clients out of ordinary 9 to 5 business hours. Alternatively, you could looking into hiring a virtual employee from another country to handle these conversations for you.
A new law system
Doing business in another country could also mean having to cater to different laws. Breaking these laws could result in fines or being banned from selling in that country.
This is most likely to be the case with certain substances or materials. For instance, a number of chemical adhesives and preservatives freely available in the US are banned in EU countries. There are also weirder items that have been banned in certain countries such as chewing gum in Singapore and even baby walkers in Canada.
In other cases, changes to packaging may simply be needed such as warning information or certain labels. It could be worth hiring packaging companies from abroad to add these features.
A difference in business culture
Finally, there is the difference in business culture to overcome. This is important to understand when appealing to customers in other countries – especially in the case of business-to-business trade.
In Asia for instance, there is often a greater level of formality in business. Customers may be expected to be called ‘sir’ or ‘madam’ and never by their first name. Swearing meanwhile may be totally taboo – even for humorous purposes – and may damage your company’s professionalism if you use it.
Similarly, countries around the world can have very different attitudes to timekeeping. In Italy, you can be an hour late to a meeting and not cause offence. However, in Japan it is much better to arrive early.
Researching into these cultural differences could be necessary before conducting a business abroad.