As told by Experts who Have Done it
I have the privilege of serving on the Supplier Network Committee of an Illinois Manufacturer’s Association http://www.tmanet.com . This past week we hosted our Spring Business After Hours event featuring a panel of owners and experts who have successfully grown businesses by tapping in to opportunities around the world including; Asia, Mexico, Canada, and Europe. Our panel consisted of:
Mark Miller, Prince Industries – Integrated Manufacturing www.princeind.com
Bill Smith, Termax Corporation – Fasteners www.termax.com
Michael Carsella, Previsio Partners – Financing www.previsiopartners.com
Bob Hess, Newmark Knight Frank Epic – Real estate www.newmarkkfe.com
John L. Rodgers, Business Attorney, former President Midwest U.S. China Association
Together they addressed a range of critical topics from how best to enter a foreign market, where to locate, how to finance, to how will my current customers and workforce react if I do this. I was impressed by the practical and straight forward advice the panel shared based on their real world experiences.
Our world is getting smaller and global opportunities closer. I am sharing this summary of what we heard in hopes that it will stimulate your thinking about how you might take advantage of international opportunities you may have to grow your business.
Are we too small to be successful outside the US?
- 87% of global GDP will soon be from countries outside the US. There are real opportunities for many US companies to participate.
- Currently 55,000 US companies are doing business in China alone
- The internet now connects you with the global economy; you just need to find your opportunity.
- Initially you may only be exporting but that’s a start. Identify where your best opportunities are before you make larger investments in facilities and people.
- We have seen companies be successful with as little as $400k a year in exports
- It is not about your size, but rather a personal choice you make to do it
- In this global economy, we could not afford to ignore it any longer
How should we get started?
- Across the panel, the most effective way to get started is to follow your customer to these new markets. That way you know you will have a base of business to build on.
- Talk to as many people as you can, both here and in the target country
- Be sure to leverage government programs. They are out there, waiting to help you
- Look for English speaking people who are willing to spend the time with you
- Keep asking questions until you get answers that make sense
- Do not rely on anecdotal evidence, but get objective help
How will this impact my current business?
- Bench strength – Initiating an international strategy will take your focus and initiative away from your current business. Can your leadership team successfully run the day-to-day operations of your domestic business and keep it growing, while you are lunching this new business.
- Employee Reaction – Have a clear plan and strategy for why you are doing this and how it will strengthen the company. Then take the time to communicate to everyone. Yes, there will be concerns about people loosing their jobs so; explain that the majority of job loss in the US is from technology and automation; the purpose is to grow the company not reduce it; a healthy company makes them more secure, not less. Then you have to go make it work!
- Customer Reactions – Our customers were pleased. In fact, they would be disappointed if were we not growing internationally. Only one customer didn’t understand and decided to stop buying from us.
Top 5 Watch-outs
- IP Theft – Do your homework and register your trademarks, patents and any other intellectual property before you start shipping or producing overseas
- Corruption – It’s out there, be aware
- Infrastructure – be prepared for variability in utilities like power, water and local services
- Cost of Quality – Differences in culture, education and capabilities will impact the quality of the work that is produced. Quantify these differences and build it into your cost structure. Your customers still expect the same quality from you– it’s your job to figure out how.
- Leadership – It typically takes longer for xpats to come up to speed than for locals. There are more and more talented local managers and leaders you can work with in country. Invest the time to know and train them, both here and there.