Entering new markets in strategic geographic locations can offer your small business attractive growth opportunities that will help fulfill your long-term vision.
While that may sound exciting, it’s also easy to forget that it can be very challenging to work in countries other than your own, and navigate through cultures you aren’t familiar with. Below are a few pitfalls you’d want to avoid when ramping up your small business for global success.
Table of Contents
Don’t get too comfortable negotiating from your office
When first dipping your toes into international waters, chances are you’re doing it from your local office. After all, technology allows us to make calls cheaply, use video conferencing to “meet” virtually and use social networks to get a “feel” for someone’s personality or check out references. It seems like the perfect set-up to save money and get things done. However, by sitting back in your chair, you may be missing out on even bigger savings. Go direct to your source and get to know them.
Don’t rely on local contracts being 100% enforceable
In North America or Europe, we rely on contracts heavily to make sure all parties entering an agreement understand what’s on offer and accept the terms as binding. In partnerships, for example, it’s always good to have things laid out at the beginning, so that if things ever sour there’s a straightforward document in black and white that can protect both parties from a bad ending (emotions can often get the best of us).
However, in many countries, especially developing countries in Asia, South America, Africa for example, contracts are not as straightforward as they may seem. Unfortunately, the legal system in many of the countries with the most opportunity, are also the ones that may be the most difficult to navigate your way around.
In these cases, contracts may simply become road maps unless you want to spend a fortune to enforce them. While it’s important to have a local lawyer create and review your legal documents, what may be as important is the influence your personal contacts yield. Don’t do business blindly. Get referrals and try to do business with those that your close contacts have worked with or highly recommend.
One Do: Start small and avoid the big loss
Test new partnerships, vendors or customers out with small contracts that you can walk away from, but will allow you to assess if their integrity, work ethic and values align with yours. If you have the patience to do your due diligence and take small steps, you’ll never encounter that unexpected, and sometimes crippling, big loss.
What about you?
Have you expanded outside your local market? What’s one thing you learned that would be valuable to small businesses going international?