4 Tips to Turn Your Small Business Into a 'Micro-Multinational'
MAY 23, 2016 • Blog Post • BY CHRISTOPHER NULL, WIRED BRAND LAB
IN THIS ARTICLE
- A variety of online and cloud-based tech tools and services make it possible for SMBs to take their business overseas
- While some challenges like real-time translation are still in the works, others like freight management and currency exchange are considerably further along
How to globalize your small or medium-sized business
For many small and medium-sized businesses, the global stage represents a vast market just waiting to be tapped. According to the U.S. Department of Commerce, 90 percent of the world's customers live outside of America. Still, establishing a small business across borders can be a daunting task fraught with confusion and risk.
Thanks to a variety of tools and services that are now available to help ease the burden, SMBs no longer have to go it alone in their quest to become "micro-multinational" firms. While some challenges like translating between languages in real time have only partially been solved, other solutions like freight management and currency exchange are considerably further along.
Here are four ways SMBs can transcend borders with their businesses:
1. Let Uncle Sam help with market research
Several government entities have programs designed specifically to help SMBs go global. A great place to start is with the U.S. Department of Commerce, which offers a program called the Gold Key Matching Service, a service for domestic companies looking to export. The Gold Key program features a wide range of turnkey help, from providing market research and arranging meetings with prospective customers to offering interpreters and helping with travel planning. According to Stanley Chao, author of “Selling to China: A Guide to Doing Business in China for SMBs,” the service costs only about $500. “I have used it many times for my clients and it is the best deal for SMBs,” he says.
Individual states offer additional resources, too. Each state has an international trade office (the department's name will vary from state to state) designed to assist in-state businesses with global expansion. “These organizations provide educational opportunities and host face-to-face events with delegations from around the world who are interested in working within the state to foster international trade by importing and exporting," says Donna M. Lubrano, an adjunct business professor at Northeastern University in Boston. “Very often the advice is given and the work is done pro bono."
2. Figure out what to sell in which countries
Products trend differently in different markets. What's hot in Japan is likely completely different from what's selling well in France. One way to get an eye on local trends from the other side of the globe is through data. RankTracer Enterprise, for example, tracks Amazon online sales data for any product in any country, so users can see what's on the rise and what's on the decline—at least according to the e-commerce giant's sales data.
This data can be used for competitive analysis or to plan new product lines. “One of the startups I work with needed to work out which products they should launch with because they had limited resources to invest," says business blogger and consultant David Mercer who relies on the service. “By tracking comparison groups of different designs of the same type of products, we were able to make an informed decision about which designs were more popular and would likely be more profitable."
For many SMBs, the global stage represents a vast market just waiting to be tapped.
3. Get ahead of currency and banking issues
Currency issues can be a complicated and costly part of global expansion. FXcompared is a web service that lets users compare exchange rates and transaction fees among various providers of foreign currency exchange services. “We were originally launched from an initiative with the World Bank nearly 10 years ago," says FXcompared co-founder Daniel Webber, pointing out how much money can be left on the table when dealing with overseas sales. “Most businesses just use their bank to send money but this can cost them up to seven percent more than using a currency specialist." The site also offers tools to help mitigate losses due to exchange rate volatility over time.
4. Find the right logistics partner
Actually getting products to a faraway market can be a major hurdle for SMBs. Sure, just about any freight service can deliver overseas, but large freight companies often quote smaller businesses exorbitant shipping rates because they aren't seen as a priority or as a profit center for the freight companies. Freightos is one company that aims to change this by letting users access and compare instant quotes from numerous logistics services and quickly book freight on the best option. “Using a logistics provider used to be as murky as finding the right mechanic," says Freightos marketing director Eytan Buchman. Buchman says companies like Freightos are all about transparency and affordability for SMBs.