Small Business Export Strategies

Is your small business tapping into foreign markets? There are over 6 billion consumers out there in the global marketplace. If you are only selling domestically, you are missing out on a big business opportunity.

The idea of selling in the global marketplace sounds good to most small business owners. However, unlike their corporate peers, most small businesses don’t have the resources to devote an entire department to the task of penetrating foreign markets.

In their frustration, these small business owners abandon the notion of selling their goods abroad simply because they don’t believe they have the ability to tap foreign markets.

To some degree, they’re right. Small businesses don’t have as many resources to devote to tapping foreign markets as large corporations. But the good news is that you don’t need a foreign marketing department to sell your products internationally. No matter how big your company is, penetrating markets outside the U.S. can be a relatively simple transition – if you know how to leverage the right resources.

Finding Foreign Markets

Your first step will be to identify potential foreign markets for your products. Surprisingly, one of the best sources of information about foreign markets is the U.S. government. Much of what you’ll need to know is available on the internet at the U.S. Government Export Portal at www.export.gov. Here you’ll find industry and country specific market research as well as information about preparing your business for exports, international partner listings, shipping requirements, tariffs, and exporting basics.

Foreign governments are another good source of information about foreign markets. While it’s doubtful that a foreign embassy will have the information you need at their fingertips, they should be able to point you in the right direction.

Assess Market Response

Once you’ve identified a foreign market, your next step will be to assess how the market will respond to your product. One way to do this is by participating in government sponsored trade events and/or trade missions. These events and missions are set up by the government for the sole purpose of connecting U.S. businesses with potential foreign trading partners. For a very small expense, these opportunities will help you network with global partners and give you the ability to determine how well your products will be received internationally.

Develop a Sales & Marketing Strategy

At least initially, the most effective way to sell your products abroad will not be to sell them directly to consumers. Instead, you’ll want to target businesses and other intermediaries who are better equipped to market and sell your products in a foreign market.

One way to accomplish this is by creating strategic alliances with foreign business partners. For example, if you produce footwear the best strategy might not be to open a shoe store in Australia, but rather to create an alliance with an Australian shoe store that is willing to sell your shoes. The benefit is that the Australian store is already equipped to market your shoes in the Australian marketplace.

If you have difficulty locating foreign partners on your own, another option is to engage the services of a commissioned broker or export management company to help you market your product. Brokers take a commission, but their experience in marketing Middle East products internationally may make it worth the investment.

Starting an import/export business? This article is an excellent entrepreneurial resource for companies that are considering starting an importing business or starting an exporting business.

On any given day, millions of dollars worth of goods are traded on the global market.

Some of those goods are exports, or products sent outside the Middle East by domestic manufacturers. Others are imports, or products manufactured abroad and brought into the Middle East to be purchased by Middle East consumers.

Sometimes the manufacturers and distributors of imported and exported goods have established a system to deal directly with one another. However, many manufacturers and distributors don’t have the resources, desire, or know-how to do it on their own. Instead, they rely on the services of a middleman – an importer/exporter – to make contacts, arrange deals, and deliver the products.

Starting an import/export business may seem daunting if for no other reason than it necessitates operating in an unfamiliar business environment. But for a business with relatively few startup costs, the rewards of importing/exporting are definitely worth it. Importers/exporters typically earn big bucks – 10% of every transaction. With a little organization and perseverance, there is nothing stopping you from turning a small start-up into a thriving import/export company.

To be fair, importing/exporting involves an endless litany of details. That being said, here is a simplified overview of what it takes to launch a successful import/export business.

STEP 1: Establish Contacts

Once you decide to enter the import/export field, your first task will be to make contacts with foreign manufacturers and distributors interested in trading with Middle East-based firms. Start by making a list of the people you know who live outside the Middle East – friends, family members, business acquaintances, etc. You might be surprised how many contacts you already have.

But even if you don’t know anybody outside the Middle East, you can still make contacts through foreign-based embassies in the Middle East, and government sponsored programs designed to stimulate global trade.

STEP 2: Identify and Research the Market

Your next step will be to identify a target industry and market. Part of your decision will be based on the contacts you have made, but you will also have to do some research to stay abreast of trends and other factors that will determine the viability of a given market.

You should also investigate trade barriers, tariffs, and other restrictions that may affect your activity.

STEP 3: Make the Deal

After you have identified and researched your target industry and market, you can begin the process of approaching your domestic and international contacts about their needs. Your job will be to play the role of matchmaker, matching manufacturers and distributors in the Middle East with foreign partners and vice versa.

Once you’ve made the match, you’ll need to negotiate a deal that is satisfactory to both parties. The terms of the deal will need to be agreed upon in writing, taking into account issues such as price, quantity, delivery timeframe, shipping and letters of credit (secured payments).

STEP 4: Deliver the Goods

Many businesses employ the services of an importer/export simply because they don’t want to deal with transporting their products internationally. That means you’ll need to learn how to cut through the red tape and oversee the products delivery in a timely manner. This will get easier as you grow increasingly familiar with the process and establish relationships with shipping companies.

International trade agreements such as NAFTA (North American Free Trade Agreement) and GATT (General Agreement on Tariffs and Trade) have lowered trade barriers and opened the doors to the world marketplace. With the rapid worldwide acceptance of ISO 9000, services and processes around the world are being standardized, assuring the customer of a high level of quality. And, as trade barriers fall and quality standards rise, overseas trade is intensifying and overcoming cultural barriers has become increasingly important. Now, more than ever, showing respect for your customer’s culture is crucial to your product’s success in the overseas marketplace.

What is Localization?

Localization is the customization of all components of a product for a particular target market. These components include user interface (UI), the help system, printed or online documentation, Web sites, advertising campaigns, and any other marketing communication materials for the product. Multilingual vendors like International Communications become your localization partner offering you the technical staff and linguistic professionals needed to efficiently manage multilingual localization projects.

Since different cultures interpret information differently, the localization process extends beyond mere word-for-word translation. The translation is an art unto itself. Translators take painstaking measures to assure that they produce a high quality translation that reflects the original intent of the writer and reads as if it were written in the target language. At International Communications, in-house native professional translators lend their knowledge of the culture to every project on which they work. Since they are natives of the culture and not just students of the language, they are familiar with all of the nuances and recent changes in the language. They are also able to ensure that the message is culturally appropriate for its target market and can provide guidance to your company in writing the original copy or text.

Internationalization - The First Step

Prior to localization, there is another very important step that prepares your product to be efficiently localized. Internationalization (I18N) is the process of ensuring that software can accept features specific to different target markets, i.e., time/date formats, thereby eliminating core issues during the localization process. When properly performed, I18N results in a generic product that can be easily localized.

When your company is targeting the Asian markets, your product must be double-byte enabled, another I18N process. The term “double-byte” describes how most of the Asian characters need to be specified by two bytes in computer operating systems. When your product needs to be localized for Asian cultures, double-byte enabling is a process in which your product is manipulated so that it is able to read Asian characters as opposed to letters of the alphabet. Double-byte engineers can identify where technical modifications could expedite the localization process. After this process is complete, your product is prepared for as many upgrades as you would like. Once a product is internationalized, it may be localized many times which can provide greater savings over the long run.

Why Localize?

According to the U.S. State Department, U.S. firms alone lose $50 billion in potential sales each year because of problems with translation and localization. For global corporations or those corporations trying to expand their markets, localization is essential to the success of a product in overseas markets. Most global end-users prefer to use a product in their own tongue rather than English, which to them is a second (or third) language. This process ensures that the product will not only be translated into the appropriate language but it will also be tailored to fit the local culture. In fact, a product that is localized well will appear as though it was originally produced in that country.

The localization process enables your company to enter new and growing markets and to compete effectively. In many countries, language barriers and nationalism preclude end-users from utilizing English-language software. For example, in China, the majority of the end-users are not proficient in English and require software that is written in Chinese. In Germany, most of the natives also speak English but they, too, prefer their software products to be written in German. These will have a better chance of competing against German products.an U.S. “800″ toll-free number that terminates in your office, for American/Canadian customers to call you.

Localization also enables your company to build credibility in non-U.S. markets. By creating a product in a country’s native language, your company conveys a respect for the culture’s history, customs and language. You also demonstrate that their business is very valuable to you and that you are dedicated to meeting the needs of all of your customers.

As the name implies, the World Wide Web provides the world with access to your company’s home page. A multilingual Web site is a critical component of your company’s international marketing strategy. Web site localization affords people from around the world the opportunity to gather information about your products and services in their own language. As in the localization of your products, internationalization and cultural nuances will play a role in the Web site localization process.

The bottom line is that localization can increase your sales and help you to tap into that lost potential. As your company gains valuable exposure, demand for your product, and ultimately your sales, will increase.

Localization Options
Depending on the scope of the localization project, you have a few language partner options: internal staff, translation firm, single language vendor (SLV), and multilingual vendor (MLV). Each option has advantages and disadvantages.

Internal Staff - Although your internal staff may already have a comprehensive knowledge of the product and its target market, your staff may also have additional responsibilities that would slow down the localization process. Your staff not only needs to be proficient in the specific language but they must also have an understanding of the cultural nuances. A student of foreign language may not have the skill for translation as does a professional, native translator. If your company decides to localize the product in additional languages, your staff would need to have the ability to translate several other languages as well as an understanding of the technical issues of localization.

Translation Firm - A general translation firm may provide a quality translation but it may not have the technical expertise necessary to produce successful localization.

Single Language Vendor - This type of vendor may have expertise in a specific language or market but project management may be difficult. You will be duplicating your efforts in terms of communicating with more than one vendor. As your company becomes more successful and your market grows, you inevitably will need to expand to other languages to accommodate the demand in other countries.

Multilingual Vendor - This type of vendor is considered a full-service localization vendor who will provide linguistic and technical expertise as well as international project management experience for as many languages as you need. Your MLV should be a partner that understands your global marketing strategy. Since they are the only vendor that will manage the project, this vendor must be chosen very carefully. During your selection process, you should: check the company’s references, visit the production sites, research whether your vendor has experience localizing your type of product and discover whether or not they truly have the technical expertise to handle large products.

How to Conquer the Complexity of Localization

A successful localization project requires a balance of time, cost and quality. With preparation and communication, your company’s localization process will be less complex. Communication is the key to maintaining this successful partnership with your language vendor. We offer the following tips:

Your Localization Partner

It is critical to establish a partnership with your localization vendor. The vendor should meet with you to learn about your international objectives, to discuss how to manage changes to your product, and to learn about your time- to-market deadlines. Because localization is complex, you need to feel as though you can rely on your partner’s guidance throughout the localization process. Once you hire an expert in the industry, you should take advantage of their resources and experience to get the most out of your partnership. Ultimately, your localization partner should have a true understanding of your return on investment objectives and goals.

Product Planning for Localization

It is important to plan for the multicultural aspects of your product right from the start. While designing your product, your developers should be cognizant of cultural allusions and regional colloquialisms that may not be easily localized. Writers, marketing planners, technical and graphic artists, programmers and all members of the production staff should be informed at the beginning that the product will be utilized by a multicultural audience. Also, it is most efficient to identify and resolve internationalization issues at the development stage of a product.

Designate an In-house Project Manager

To ensure a smooth process, an in-house person should be designated to oversee the localization process. Due to the complexity of the procedure, localization should not be assigned as an additional responsibility to a staff member but rather it should be his only responsibility. Since the localization process requires the reviewer to filter changes, review the process and maintain open communication with the vendor; it is a full-time commitment. This is true especially if your product is complex and you plan to localize into more than one language.

Monitoring Changes

In most cases, the vendor is not translating from a final or finished, English-version of the product but rather from a beta version. Therefore, the company is constantly making changes and updates as the vendor is executing the localization process. To avoid wasted time, the company should schedule its updates in advance so that the vendor may anticipate and plan for the modifications. The company also needs to clearly identify any changes that need to be made. Your in-house project manager will be instrumental in the communication process as the main point of contact with your partner’s project manager.

Review

>The company also needs to designate a third-party reviewer, such as a distributor, to review the localized product. You should inform the reviewer of the amount of time and work the process will entail so that he has realistic expectations. If the reviewer doesn’t respect the company’s timeline or identify his proposed changes clearly, the localization process can be held up and the final product may be late.

Sequence of Events

The sequence of events is also crucial to a smooth localization process. The ideal is that the vendor localizes and gets approval for the UI first. Once that is complete and the translation style has been approved by the company’s reviewers, the vendor will be armed with the specific terminology to be used in the localization of the help, documentation and accompanying screen shots.

Generally, the UI is the gating item. The faster you review it and abide by the schedule, the better able your vendor can meet their deadlines. If the company chooses to review UI, help and documentation at the same time, they will have to review screen shots taken from software that has not been approved yet. If the company then decides to make changes, they will have to be made to these three elements. As a result, the vendor may possibly be repeating steps already taken such as retaking screen shots. It is also important that the changes are clearly identified so that the process will move more quickly.

In some cases due to scheduling pressure, you may choose to review the entire product before the UI is final. In this case, be aware that if the terminology changes, the vendor will have to go back and change the screen shots. As a result, there may be an extra cost incurred and it may affect the schedule and deadlines.

Upgrades

Since only the new material needs to be localized, the localization process for product upgrades can be completed in a shorter amount of time. To ensure the timely execution of the project, it is important to identify the new or modified portion of the product. By doing so, the vendor can translate and insert the specified information into the existing localized product. Since the vendor will not have to translate the entire product, your company will reap the benefits of a great time and cost savings. Please note that if changes are scattered throughout the product, it will be harder to leverage existing material.

Tools

When choosing a localization vendor, you should inquire about the translation memory tools that your vendor uses. Some vendors will only use specific tools while others may be willing to use the tool of your choice. In addition to being adept with most tools on the market, International Communications offers the services of its own open architecture translation memory technology, ForeignDeskÙ. Through propagation and leveraging, this suite of tools saves your company time and money in the localization process. Propagation, or the recycling of duplicate material within a project, generally achieves a 5% - 20% savings in localization costs. Leveraging, the recycling of duplicate material from one upgrade to another, can achieve 10% - 95% savings.

Timing

The company should also be prepared for any unforeseen issues. When making the announcement about the release of a product or its new version, the company should be in contact with the vendor to ensure that the timing for the release is realistic.

By taking the time to understand all of the elements of localization, you will help to make the localization process faster and easier for your company. Choose an experienced vendor carefully and get ready to welcome your new overseas customers.

By David Gulley

Characteristics of a “Great” Banker

Making a deal is one thing…getting paid is another. Although many exporters are able to demand cash-in-advance, this is often not a good long-term strategy since many foreign buyers can find competitors willing to extend credit. Typically the financing burden is on the sellerÛespecially for major projects. Unfortunately, the client’s regular bank may be wary of getting involved in international deals. The firm may instead have to shop around for export financing support. Who can a business trust to bear this responsibility? The firm’s local banker can be a conduit to the network of international banking services, or it can go directly to the international bank. A firm knows they have a great bank to manage international transactions if it has many or all of the following characteristics:

1. Bankers that are alert to potential problemsÛacts as their advocate;
2. Bankers experienced in international finance;
3. Bankers that can explain things in non-technical terms;
4. Willingness to let the client speak directly with the bank actually handling the international transaction;
5. Has its own international department (not just a Letter of Credit division);
6. Has offices in major overseas markets, and/or a branch in the target market;
7. Produces credit reports on the target country;
8. Has a well-developed correspondent banking system;
9. Can construct a foreign exchange hedge;
10. Can offer a range of services (not just Letters of Credit);
11. Knows how to advise clients in inter-company transfer techniques;
12. Is willing to train the firm (i.e., offer seminars);
13. Can build an expert support team of service providers (refer to good CPAs, etc.);
14. Is an expert in the given industry;
15. Is comfortable with the firm’ s size, age, etc.;
16. Is willing to make a loan;
17. Able and willing to use a government support program (i.e., Eximbank);
18. Has a domestic relationship with an internationally experienced U.S. bank; and/or
19. Is a foreign bank and truly has a presence to conduct commercial banking operations.

Characteristics of a “Great” Freight Forwarder

Getting the goods or samples or testing equipmentÛto the right place at the right time is essential for good customer relations and just plain getting paid. Transporting merchandise is often complex, expensive, and highly susceptible to error, delays, and unplanned expenses. Taking and processing orders, even from established customers, can be equally complex and ruinous if not handled with care. Many firms also must be adept at tracking and documenting the source of their inputs for purposes of fulfilling origin-of-content regulations. The paperwork, in other words, must be well managed from start to finish. It can make or break the profit margin. What is an exporter to look for? Because entry into the freight forwarding business is pretty open, quality is hard to gage. Finding a good one is often a trail-and-error process. The focus group suggested, however, that forwarding services are not that expensive, and this is not the place to skimp on costs. They further indicated that a great freight forwarder should have many or all of the following characteristics, some of which may require making phone calls and other investigations:

1. Willingness to take responsibility for ensuring documents are filled out accurately;
2. Experience with a wide variety of situations;
3. A good relationship with carriers;
4. A good reputation with U.S. Customs;
5. A good track record in serving other customers in the particular industry sector;
6. A good track record in serving the market to which the firm is selling;
7. In-depth knowledge of tariffs and Inco-Terms;
8. Good working access to a network of related support services, such as packing firms, banks, etc.;
9. A good report from their insurance company regarding claims;
10. Haz-mat certification, if the product is a hazardous material;
11. Documentation on their expertise;
12. Willingness to be flexible;
13. Willingness to train the company; and
14. Willingness to refer the company to another forwarder when a shipment is out of its league.

By Barney Lehrer