The Internet has opened more doors for growth than business owners may realize. Global trade was once thought of as an exotic or inefficient way to do business, but in today’s tech-savvy world, communication with someone on the other side of the planet is as simple as turning on a computer. As the nation’s economic recovery slowly gains momentum, small business owners are finding that working with international partners can help their enterprises stay strong during tough times.
With the new opportunities global markets provide, small businesses often see job growth and productivity increase by up to 20 percent. And it’s not just the company that benefits, but the whole community – working with an offshore manufacturing partner can actually create more jobs at home.
As an exporting venture grows, it needs more in-house support. In fact, exporting supports millions of U.S. jobs, while importing improves the quality of products and services offered, gives you freedom of choice and offers purchasing power.
Choosing a Global Market
As a Global Trade Counselor certified by the U.S. Small Business Administration and a NASBITE-certified Global Business Professional, I help a lot of small business owners build and navigate global relationships. I often share with entrepreneurs some of the pitfalls and best practices I learned through my experiences offshoring products to China.
Understand your market’s infrastructure, and put a strategy in place. While a prospective market may offer attractive rates, tariffs and low labor costs, consider how easy it will actually be to get your goods to and from destinations. Develop a thorough understanding of the market’s airports, ports and ground transportation.
Look at trade trends and growing economies. Your global partner should be in a country that makes doing business simple. As you consider potential global partners, take a look at national import trends. The countries with the most opportunity tend to be those that show a steady increase in imports over time. It is best to find a country whose per capita income is rising at the same time that its imports are rising.
Find a workforce that’s right for you. It’s important that the workforce you choose meet the needs of your company. For example, you may need staff that speaks a certain language or possesses certain skill sets. Another consideration is staff size – a workforce that’s too small could cause production delays.
Audit the factory you choose. It’s never safe to assume the factory you are working with is representing itself honestly. I once audited a factory I was considering, only to discover its “workforce” was really a small one-man shop within four walls and a tarp for a roof. Thus, the only way to ensure a factory truly meets your qualifications is to perform on-site audit.
In this venture, your greatest ally is an independent Supplier Quality Engineer (SQE) with auditing experience, product knowledge and experience with relevant manufacturing processes. In addition to the initial audit, you should also schedule follow-up inspections to ensure the quality and safety of your goods.
Establishing Global Relationships
Like doing business at home, forming key relationships abroad can help ensure quality control. I personally advise extending this type of professional relationship beyond the telephone and email inbox to include face-to-face meetings whenever possible. While this does mean a lot of traveling on your part, building such a relationship automatically puts you in the know if there’s a crisis. It also helps protect your company’s image, intellectual property and interests.
If you don’t speak the language of the country in which you are doing business, hire the assistance of a resident professional negotiator, such a lawyer, who also speaks English. I always use a negotiator in China because it assures that my company’s goals will be understood and met – and that the information relayed to me doesn’t get lost in translation.
If you’re ready to expand your business, it’s time to go global. With today’s enhanced technologies and services, the trading arena for small business owners is brilliantly dexterous.
About The Guest Author: Michael Bloom is President of Sinotech in Portland, Oregon, which has been engineering and supplying custom mechanical and electromechanical parts to clients across the globe for over 20 years. Michael is certified by the U.S. Small Business Administration as a Global Trade Counselor and by NASBITE International as a Certified Global Business Professional (CGBP).
Global Network of People Photo via Shutterstock