6 Things to Know Before Conducting International Business

The prospect of shipping your goods overseas or importing materials from foreign suppliers is truly exciting.

But let’s face it, not all businesses are ready for international transactions. I know the advent of technology coupled with the latest modern developments in commerce has made it easy for businesses to transact with anyone around the world. But even at that, international business dealings aren’t for everyone.

The fact your closest competitor has started shipping its products to neighboring countries doesn’t mean you’re ready for that jump, too. International business dealings entail a lot.

But if you're hell-bent on scaling up and expanding internationally, below are some crucial factors you must consider first. Feel free to kickstart your international dealings if you think you're good to go on all fronts.

6 things to know before conducting international business

1. Access to credible partners

To do business internationally, at any level, you need to partner with people. This partnership could be struck at any point in the transaction chain. It could be at the sourcing, legal, shipping, marketing, or custom level.

Many businesses face the challenge of finding credible individuals, agencies, or companies to strike business partnerships with.

Although technology has made it easier to find and connect with potential business associates worldwide, the issue of trust and authentication of identities is still a big hurdle. To tackle the trust hurdle, what many businesses do is that they hire notary services near me. Notary Publics help them authenticate companies, signatories, and other entities involved in international transactions.

In summary, before you jump on that exciting business deal someone is offering you overseas, ask yourself how feasible it is to find credible partners across all levels of the business transaction.

Once you find partners, you can hire Notary Publics on the nicelocal.com. There are plenty of credible Notary publics on the platform. When you need to expand or partner internationally but can’t travel to meet with partners in person, these notaries will help you execute, for example, Power of Attorney so that overseas lawyers can act on your behalf.

2. Financial aspects

Money is involved at every stage of a business scale up. And so, it's true for international dealings, too. Whether you're looking to import or export goods, you're going to need to budget extra funds for travel, shipping, customs duties, phone calls, clearances, and middlemen.

In summary, it costs a lot more to deal internationally than locally. So, before you make up your mind to embark on international business, ask yourself whether you’re ready for these extra expenses.

On top of that, dealing internationally also means a slower pace of cash flow. No thanks to foreign exchange and cross-border approvals, it often takes longer to move and remit funds involved in international dealings. As a result, your business may have to survive without cash inflow for some time. Ask yourself if you can cope with this before embarking on international travel.

3. Feasibility

It is one thing to desire to go international; it is another to execute these desires. Before thinking about doing business internationally, you have to consider the feasibility of the proposed dealings.

Has anyone done it before? What are the common challenges faced? How will you navigate various aspects of the transaction process? These are the kinds of questions you need to ask yourself at this point.

Many business experts advise that it’s good to be skeptical when analyzing the feasibility of a business project. The belief is that analyzing with skepticism helps you spot challenges and potential stumbling blocks faster than when you’re hopeful from the start.

4. Language barrier

Communication is another huge part of any international deal. At various levels, you'll need to communicate with people to get your deals over the line. Now, depending on the language you and your partners speak, it may be impossible to communicate using a common language.

To cope with this barrier, you’ll need to hire a translator.

The question then is, can you afford a translator? Or better still, do you think your business is ready to add a translator to its payroll? Answering this question honestly will help you determine whether you’re ready for the jump or not.

5. Market readiness

I believe you're considering foreign business because you think there's a market for you. While that may be true, you still need to conduct proper market research to be sure your business is heading in the right direction.

Some businesses consider the fact their competitors are already in one country as an indication that there’s a market lying in wait for them. But that is sometimes not true.

Let me paint you a picture.

A Hypothetical Scenario

A business A decides to go global with its beignets business. And that turns out to be a successful move.

Then another business (business B) from its home country dealing in burgers decides to join the train. Logically speaking, this is a good path to follow. After all, a pastry company from its country has shown there’s a market for pastries in this new country.

Unfortunately, the residents of the new country aren’t so intrigued by burgers. The stuffings are kind of a turn-off for many. As a result, business B failed.

Clearly, this business failed because the owner has failed to consider the market readiness for its type of products.

6. Ease of exit

Finally, you need to consider how easy it is to get out of a foreign market if things go south. And yes, you need to make this consideration before you even lay a brick in the new country.

As you can imagine, it’s far easier to exit a market you’ve only made a small investment in rather than one you’ve invested heavily in. When looking to do business internationally, you need to consider the possibility of starting on a small scale. If your business is the type you can’t launch on a small scale, then you must know that the ease of exit is going to be very low.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes