How to Turn a Local Business into an International Success Story
The general trajectory for a startup goes like this: local & national & international. Of course, there are exceptions to this rule. The internet has made it possible for businesses to serve international customers straight away. However, the process of building a corporate conglomerate like Coca-Cola or Tesla requires building blocks.
Perhaps the hardest part of the process is laying the first block. Getting a business off the ground and making it work on a local level isn’t easy. This doesn’t mean things get any easier once you’re up and running, but there’s a certain tipping point you only get at the start of a new venture. If it tips one way, the business fails. If it tips the other, it has a chance to be successful.
Once a business has taken its first proverbial steps, maintaining the momentum requires a different set of skills, such as marketing and expansion. Indeed, a company that’s successful on a local level (or small scale) needs to increase its output in order to thrive nationally. Now, given that California has a population of 39 million and a massive economy, staying local is fine for most businesses in the state.
According to the statistics, California has the largest sub-national economy in the world with a gross state product (GSP) of $3.5 trillion. For context, this puts the state’s economy on par with the UK and other major countries. Therefore, if a Californian business only ever achieves local success, it’s doing pretty well. However, for entrepreneurs with grand plans, achieving success on a national level is next.
Three Factors to Consider When Going International
In most cases, this simply takes time. Because you’re serving customers in the same country, not a lot has to change. The next major shift in a company’s evolution is international expansion. Serving customers in different countries requires an understanding of new variables. Three of the main variables that need to be considered are:
Currency
Trading outside of the US means understanding the value of other currencies. To be more specific, you need to know the relative strength of other currencies compared to USD. That’s where you need to become economically savvy. The DXY (US Dollar Index) tracks the relative strength of USD against a basket of foreign currencies. Looking at the overview and, in turn, a snapshot of news updates online tells you whether USD is strong or weak. That’s important. A strong USD means it has more purchasing power abroad i.e. you get more of a foreign currency per dollar. That’s good if you’re importing products. If USD is weak, it’s cheaper for foreign companies to buy goods from the US, which is good if you’re exporting.
Economy
As well as tracking the relative strength of currencies, you need to know how national economies are performing. In general, a strong economy means businesses and consumers have more disposable income and, therefore, purchasing power. That’s a good market to be active in. Of course, there are still opportunities in tough economic climates. However, as a business that’s only just starting to explore international opportunities, it makes sense to
focus on strong economies first.
Customs
The final thing to think about before you go international is local customs and trends. Things that are popular in the US might not be abroad. Similarly, there will be certain cultural norms you have to follow in different countries. For example, let’s say you’ve set up a business meeting in China. According to Santander Trade, the giving of a small and not too expensive gift is customary as it signals the start of a relationship. There are also customs surrounding dress code, hand movements, and business cards. All of these things need to be considered if you’re entering a new market. There are many more obstacles you’ll need to overcome. Taking a business international isn’t easy. However, if you can get the fundamentals right, you stand a much better chance of progressing through the levels of business and offering your services to the world.
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