Roughly 96% of active consumers live outside the United States, according to the Small Business & Entrepreneurship Council. So it isn’t surprising that businesses aim to have an international appeal. Business owners, however, need to thoroughly consider factors that affect the income stream and launching abroad is no different. Several factors need to be looked at before you decide to take your business overseas.
Preferred Payment Methods
While consumers in the US are highly comfortable with using credit cards like Visa, MasterCard, and others, the payment habits of overseas markets can differ, says Patricia Carlin of MerchACT. You’ll need to consider what their preferred and hassle-free payment method is to facilitate purchases by your overseas clientele. Some popular payment methods by international markets are bank transfers and wire (money) transfers. What you’ll need to look at is how long money takes to clear through both methods and how much you may need to add (or detract) from retail price to make a profit and draw in clients.
Distinct Cultural Differences
Just as you would expect every state in the US to have nuanced differences in their purchasing practices, every country has its own distinct culture that can impact how your business is perceived and received. A good example of how a big brand flubbed on a cultural front is Heineken and Saudi Arabia. Heineken mistakenly put the flag of Saudi Arabia—which has a verse from the Quran—on the bottle. Muslim religion strictly forbids the use of alcohol and a massive backlash was received by Heineken. You’ll need to consider what international cultures are compatible with your brand to avoid cultural clashes.
The biggest thing you’ll need to consider is the operational logistics of taking your business overseas. If you’re looking beyond e-commerce, you’ll need to factor in a physical location, staffing, equipment, shipping, government permits, and so on. You will need to think of the necessary steps to obtain a Saudi Arabia visa for all of your employees, and that can be quite a burdensome process. As an alternative, you could consider partnering up with a local business owner to help your brand acclimatize to the new market its in. It is highly recommended that you spend time in the country you’re thinking of branching out to, says Stanley Chao of All In Consulting. Knowing the lay of the land, the market, and even potential competitors can better prepare you and your product to best appeal to a foreign market.
Starting and running a business in your area is challenging enough. Taking your business overseas carries its own set of complications that you will need to prepare for. Practice due diligence and review each angle repeatedly so you can fully determine if launching abroad is feasible and practical.