Small businesses branching out

Simon Lawrence explores the pitfalls and advantages of marketing overseas, if your business is looking to grow international sales.

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23rd September 2009 at 9:37 am

Times have certainly been tough lately, and small business owners are likely to have grown tired of battling for customers in an overcrowded market place.

Faced with fierce competition, many have decided to look further afield for new business in an effort to reach a wider audience and increase sales.

Although taking products into new markets is an attractive proposition, it is not a move that should ever be taken lightly, and business owners should take time to properly assess the pros, cons and issues they may face when making such a move. To operate in foreign markets effectively, there are a number of important areas businesses must first address.

First of all, building in enough time to create a sound business plan in the early stages of the move will pay dividends in the long term; and thorough marketplace research is imperative. Businesses can’t afford to get carried away with the idea of expanding overseas and be blind to potential risks.

It is vital to have a solid understanding the business landscape in each country. This includes knowledge of size of the business universe, broad characteristics of the businesses, some view of the level of sophistication, business culture or adoption of direct marketing (DM) and importantly, the infrastructure to support direct marketing.

You should utilise all resources that can offer advice. For example talking to the local government, chambers of commerce and other business resources can help gather information on the size and characteristics of various markets.

Once you have carried out suitable planning and research and are ready to launch, the first hurdle you may face is that of the language barrier. Although many non-English speaking organisations are happy to do business in English, some aren’t and will not welcome you calling and speaking in a non native language – even if you are trying to buy.

Low brand awareness in the early stages may also slow down the sales process; however partnerships with established brands to add recognition and trust can help get things moving more quickly.

When dealing with finances in foreign countries, managing exchange rates can be bewildering and extremely complicated.

On paper, what initially appears to be a profit can be massively eroded by variations in exchange rates. You need to be part accountant, part economist and part fortune teller!

Small businesses can get advice from their banks on this, but the banking schemes for fixing (hedging) rates are very expensive. We’ve found Amex to offer the best value and the most support – but I strongly advise that people seek a range of views and schemes before deciding. Being prepared to simply risk the rate on any given day may be the best solution in many circumstances.

When it comes to data, you must be aware that not all countries will have good sources which are accurate and well maintained. It also may not conform to similar standards and address structures as the UK.

Even countries in Western Europe can have complicated, cumbersome and outdated data. Finding the data you need for a European or global campaign can be extremely time consuming, with some countries like Greece, Cyprus, Switzerland and Austria being particularly problematic.

Rather than rule out DM campaigns all together, businesses should work around these issues in order to get their messages to the appropriate prospects. Businesses should also set up systems to ensure data is captured from the responses, to be stored for later use.

For marketers, understanding how European privacy legislation is interpreted and practiced in each country can be tricky. Confusion can lead to big and expensive legal problems – which has led some companies to cease any lead generation activities while they formulate policy to avoid the increasing levels of complaints and legal escalation.

Building relationships with experienced and knowledgeable suppliers and partners can assist in ironing out initial hiccups, but be aware that this can be a lengthy process, and one which must not be rushed or overlooked.

For any small business considering crossing borders with their campaign, the best advice I can offer is to do your research, work with experts, have a plan but be prepared to adjust it, if needs be.

The benefits of not relying solely on one economy and allowing your products or services to reach a much wider audience can be substantial, but the task must be approached in the right way.

Simon Lawrence

Simon is the founder and CEO of Information Arts one of the UK's leading business-to-business marketing consultancies set up in 2000. Simon has over 17 years experience within the industry and is widely regarded as a leading expert in businesses marketing to other businesses. http://www.information-arts.com/

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