+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
Companies are looking overseas to tap into global trade for a number of reasons. Among these are avoiding the risks associated with focusing on a single market, capitalizing on new growth in emerging markets, and taking advantage of lower foreign costs as compared with domestic costs. If you are thinking of going global, consider the following tips:
1. Determine appropriate targets. Focus on one country at first. After things are happening there, then move to the next hot spot. Don’t try and expand internationally too fast as some businesses make the mistake of spreading themselves too thin in their global expansion.
2. Make friends with the locals. Determine whether there are individuals and companies who you can align with to help pave the road ahead. Each market is different in regards to business culture. For example, what works in Japan may not necessarily work in the Philippines.
3. Leverage local currencies to drive the cash. Leverage the appropriate foreign exchange (FX) strategies that can take advantage of currency fluctuations. Don’t view FX strategies as an operation function. When businesses simply look at FX as an operations function, often international transactions get treated by the accounts payable or accounts receivables department as just another payment that needs to be processed. This is dangerous as the foreign currency markets are volatile and if exposure is not actively managed, it can have a negative consequence for your firm.
Though your company may have many reasons to go global, the main motivation is usually to make more money. If your global business strategy is implemented properly, the benefits can be yours for the taking.
GPS Capital Markets
Salt Lake City
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.