Going International: What You Need to Know

Many small business owners are considering entering international markets to expand their business. Regardless of the economic climate, there are several things you need to know first.

Entering international markets is a logical growth step for many companies. Selling products beyond your borders, however, is not a trivial matter. Here are a few questions to make sure you ask before entering an international market.

1. Have you researched your new target markets to make sure that the product is really needed? Does your business plan show revenue growth and is the ROI higher than taking your product into additional vertical markets domestically?
   
   
2. What is the competition like in your new target markets? Competition outside of domestic markets can be vastly different.
   
   
3. How will you distribute your product?
   
   
4. Are there any laws and regulations that determine how the product is built, sold, or used?
   
   
5. Will an American English version of the product work or do you need to have a localized version of the product?
   

The quickest way to learn about your new target market(s) is to partner with a local distributor. A good distributor will be able to help you answer the questions above and will help you determine if there is a solid business opportunity. If there is a significant market the distributor can be your local operation for sales, marketing, installation, support and services.

The advantage to using a local distributor is that they will help you learn about business, cultural and language issues that you may not be aware of and may not be equipped to handle on your own. It is not uncommon for companies to start their international operations using distributors and then add their own direct operations over time.

Once you’ve decided that going global is right for your company be aware that the internal changes will be significant for your company. Here are a few challenging opportunities that will present themselves:

• Time differences – 5, 8, 10 … hour differences make scheduling meetings difficult.

• Communications: face-to-face communications will be rare given the cost of international travel, so most of your communications will be done via e-mail and conference calls. This can be a challenge especially when you are dealing with controversial issues.

• Marketing, sales and support will need to be visited to determine what services are needed and how they can be provided.

• Multiple product versions – For hardware products, in order to comply with laws and regulations it may be necessary to have international versions of certain components of your product. If you have a software product, it is recommended that you internationalize your product so that it can support multiple languages.

• Cultural differences: language differences and business styles may take some getting used to when dealing with other countries.

Going international is a great way to grow your company! Just make sure that you do the appropriate due diligence before entering new markets.

Human Resources in a Recession

One of the many topics that business owners are continuously asking me about is Human Resources and how to manage their people through these unchartered waters.

My response: Now is the time to do what we should always be doing and that is to use and develop our Human Resources to their fullest potential. Our employees are our most valuable resource and, therefore, we need to address this critical asset head-on.

• Do performance reviews diligently and more frequently. There is no better time to clarify expectations (and probably get a positive up-tick in performance) than now.
  

• Provide Leadership like never before.
  
  • Your employees look to you for stability and guidance during difficult times.
  • Give them articles or have short seminars about money management, positive news, and future challenges.
    
  • Educate and communicate.
  • Share positive news regularly.
    

• Consolidation of jobs is common place as volume decreases and activity reduces.
  
  • Good job descriptions and knowledge of your workforce’s abilities and potential are critical to doing this analysis well. These make those performance reviews a lot easier!
    

• Rank your staff by their contribution to the bottom line and/or the ROI of their cost to the organization. Sales and production staff become disproportionately valuable in an economic downturn.

• Adjust wages, benefits, and perks to better align with shrinking revenues and margins.
  
  • You are the steward of this economic ship and are responsible for its success and must make hard decisions.
  • Is there someone who is overpaid or underperforming?
    

• In many cases, layoffs are necessary.
  
  • Your best employees deserve consideration for their hard work and loyalty.
  • Many considerations need be thought through before taking actions: will several employees share in the layoffs and work alternating weeks to draw unemployment periodically; will you provide job attached status to key employees you want to return, will you offer a return to work bonus after the period of layoff ends, etc.

• Possibly reducing hours is an alternative, either in select slow parts of the business or across the board.

• The labor force market has turned around over the last six months and this might be a time to upgrade talent and experience.
  
  
• If you are hiring, there are some great people available. However, be aware that not everyone is a top performer. For many companies, when they are letting go of people, they are laying off those who are the poorest performers - their bottom 20%. May sure your hiring process includes Leadership and Communication Style assessments.
  

DO NOT WAIT to take the necessary actions required to right your economic ship until you are overly vulnerable and might not survive. DO WHAT IS NECESSARY so that you have cash yet are poised for recovery when the tide comes back in.

Customer Advisory Board

Regardless of the economic climate, it is always easier and cheaper to keep customers rather than go find new ones! If you are a “market-driven” company, then you will want regular feedback from your customers. One way to solicit input and have an on-going dialog from your customers is to have a Customer Advisory Board. A Customer Advisory Board is typically made up of “strategic” customers and/or partners and key members from your staff. You will want to have a set of customers that represents a broad segment of your market – different industries, segments/markets and user types. Establish a meeting on a regular basis (perhaps quarterly or twice a year – depending on your business). Ideally you want to be face-to-face. If that isn’t possible there are a number of technologies that you can use. Consider mixing it up –maybe face-to-face meetings twice a year and then video, conference calls, webinars, etc. for other dialogs.

Topics for your Customer Advisory Board can include product direction (new markets, products or features), getting feedback on marketing messages, documenting service/support requirements, or testing out new pricing and/or packaging ideas to name a few. Another key topic will be to continue to keep your pulse on your customers business and how the economic and political climate is impacting them. These can be some important early indicators for your business, especially to gage when they feel that they are heading out of the recession.

The Advisory Board will often have topics for you too! When I ran Customer Advisory Board’s, customers always came up with new ideas that hadn’t been thought of. The Customer Advisory Board is there to provide you with inputs, ideas and validation. Your customers will benefit as they often get to see/hear about what is coming next before everyone else and you are continuing to build a strong relationship with them by making them an integral part of your business. Make sure you have an agreed upon agenda prior to each meeting that states what you will cover and what you want to accomplish during the meeting so that everyone walks away with value. Your customer’s time is valuable (as is yours) so make sure there is something in it for them too (WIIFM – what’s in it for me).

When you are selling your product/service, you can tout that you value the inputs of your customers so much that you have a Customer Advisory Board to provide on-going feedback to the organization. Be prepared to be amazed at what you will learn from your customers, not to mention that they will be feeling your “love” knowing that you pay attention to them.