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id you know that 95 percent of the world’s population livesoutside the United States? That going global isn’t really allthat difficult? That when you determine your business isready to go global, you are well on your way? That resourcesare aplenty on the Internet to help you expand overseas?Chances are, you’re one of the many business owners toobusy to pay attention to anything other than running yourcompany. Our goal here is to help you get your arms arounda host of issues to help you expand your business globally—if that is, in fact, the right thing for your business.We consulted with leading experts in the field of international businessand picked the brains of a new breed of young, bold international entre-preneurs to learn the basics of global expansion. We came up with 14 solidtips for getting started in the global marketplace. Read on to find out whichadvice suits you.

Tip1

Determine how much you can afford to invest in your interna-tional expansion efforts.

Will it be based on 10 percent of yourdomestic business profits, on a pay-as-you-can-afford process or on gutinstincts? “Early on, I just wasn’t ready financially, emotionally or intellec-tually to go global,” says 37-year-old Greg Bernstein, president of Dallas-based Global Outdoor Services, Inc., an outdoor advertising media buyingservice that assists clients in buying outdoor media both domestically andin Europe. “But years later, I was. It went great only because I learned howto overcome language barriers, manage time differences and lock in onexchange-rate contracts.”

Tip2

Plan at least a two-year lead time for world market penetration.

It takes time and patience to build a great, enduring globalenterprise, so be patient and plan for the long haul. Nobody knows this bet-ter than 29-year-old Javae Wright Sr., CEO and chair of Leadaz InternationalSportswear, Inc., an athletic footwear and apparel company in Champaign,Illinois. Wright’s company relies on strengthening the mentality of athletesabroad by promoting all that the company stands for: leadership.In his company’s early days, after its launch in 2002, Wright’s biggest chal-lenge in crossing borders was the long lead time for orders. “We would placeorders with our Chinese manufacturer and then expect delivery within aweek. We would forget that the goods—thousands of miles away—movedslowly by vessel to the port of entry and then by truck. An international ship-ment also required customs clearance, a factor that adds even more time on

GOING

GLOBAL

by laurel delaney

14 TIPS FROM LEADING EXPERTS ANDBOLD ENTREPRENEURS WILL HELP YOUEXPAND INTERNATIONALLY

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G e t t y I m a g e s

to the delivery schedule,” says Wright. “The lesson we learnedand caution others on is to establish a grace period of about aweek if you want to meet customer deadlines.”

Tip3

Pick a product or service to take or source overseas.

You can’t be all things to all people. Decide onsomething, then stick with it. “And don’t take no for an answer,”says Wright. “Persistence is more important than all else.”

Tip4

Conduct market research to identify your primetarget markets.

Find out where in the world yourproduct will be in greatest demand. Market research is a pow-erful tool for exploring and identifying the fastest-growing,most penetrable market for your product.Take the case of Gregor Sokalski, a 31-year-old Americanand an MBA graduate of the University of Chicago. Sokalskidid a stint in London as an investment banker for a yearbefore switching to an Internet B2B startup. He then startedLondon-based Moxie, a high-quality takeaway food retailerthat was grounded on the principals of highly successful U.S.business models. Had Sokalski conducted more extensivemarket research, worked at a similar business for a while orused a London food retailer business model instead of U.S.–based model, he may have saved himself a lot of dough.“Everything worked for Moxie but its location. We hadgreat press and loyal customers, but just not enough of themwere there at breakfast,” says Sokalski. “You need to be partic-ularly sensitive to cultural issues in your foreign markets. Thismay require a year or two of experience working with an estab-lished local company before you forge out on your own.”

Tip5

Research the data to predict how your productwill sell in a specific geographic location.

Doingyour homework will enable you to find out how much you willbe able to sell over a specific period of time. “Attracting andretaining sophisticated local talent will enable you to under-stand the local market and the industry much faster than any-thing else,” says Sokalski. “In the end, you need to be runninga business that is local, not simply an American outpost in aforeign land.”

Tip6

Find cross-border customers.

There is no busi-ness overseas for you unless you locate customersfirst. The solution is to focus on a free resource such as the U.S.Commercial Service, which provides customized marketresearch, general insights (including cultural), and marketreports on various industries in almost any market in the worldwith export potential. “Most of our services are of little or nocost to companies,” says Mary Joyce, network director, U.S.Department of Commerce, Upper Midwest Export AssistanceCenters. “One of our key services, the Gold Key, actually setsup appointments with potential buyers, agents and distributorsfor a company, making a business trip for any size companymuch more efficient and cost-effective.”Sokalski advises never to stop developing your own foreignnetwork of customers and professionals at the top of your indus-try. “Call them up. These people can be helpful to you in moreways than you can imagine. If they see that you know your stuff,you will be surprised at how forthcoming they can be.”

Tip7

Establish a direct or indirect method of export.

Itall boils down to export strategy and how muchcontrol you wish to exercise over your ventures. On the otherhand, readiness to seize an opportunity is more important thanhaving your whole strategy nailed down beforehand. “You sim-ply must believe in yourself, your idea and your strategy,” saysSokalski. “Seven out of 10 will tell you it won’t work. It maynot, but if you don’t try, someone else will.”

Tip8

Hire a good lawyer, a savvy banker, a knowl-edgeable accountant and a seasoned transportspecialist, each of whom specializes in international transactions.

You may feel that you can’t afford these professional services,but you can’t afford to do without them. Listen to their advicewithout bias. Says Sokalski, “If you haven’t made it happen yet,there is a lot to learn from these individuals who have.”

Tip9

Prepare pricing, and determine landed costs.

Beready to test out your price on your customer,and then negotiate from there. For Leadaz, quotas—a specificunit or dollar limit applied to a particular type of good—on cot-ton and polyester fabrics used to manufacture its productsbecame a pricing problem. Luckily, the quotas were lifted in January; if they had not been, Leadaz would have been forcedto source elsewhere or pay a 50 percent premium on the priceof the products. Customers would have balked.The next logical place to source was Mexico, where thetransportation distance was shorter but pricing was still high-er, even without quotas. “It nearly became a wash,” saysWright, “but we are relieved to continue with our Asian man-ufacturer, because they offer remarkable efficiency.”

Tip10

Set up terms, conditions and other financingoptions.

Agree on terms of payment inadvance, and never, ever sell on open account to a brand-newcustomer. Many young exporting companies fear dealing witheither how to get paid or how to finance their transactions.Tess Morrison, director of the International Trade Center

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expert tips

“MOST OF OUR SERVICES ARE OF LITTLE OR NO COST TO COMPANIES. ONEOF OUR KEY SERVICES, THE GOLD KEY, ACTUALLY SETS UP APPOINTMENTSWITH POTENTIAL BUYERS, AGENTS AND DISTRIBUTORS FOR A COMPANY,MAKING A BUSINESS TRIP FOR ANY SIZE COMPANY MUCH MORE EFFICIENTAND COST-EFFECTIVE.”

—MARY JOYCE, U.S. DEPARTMENT OF COMMERCE