Business Success Strategies Q&A with Laurel Delaney: Going Global for Business Growth
By SBE Council at 11 February, 2014, 12:20 pm
It’s a fact – small businesses that sell globally grow faster and create more jobs. For example, A UPS “Perceptions of Global Trade” survey of 1,000 small businesses found that small firms engaged in global trade are 20 percent more productive, and produce 20 percent more jobs. Still, only a fraction of America’s small firms export their goods and services.
[For additional information to help you go global, visit SBE Council’s GOING GLOBAL resource page.]
About 95 percent of the world customer base and 70 percent of global buying power lie outside of the United States. So the push is on to get more entrepreneurially firms engaged in the global marketplace. The good news is that more small firms are thinking about global expansion. In a survey conducted by SBE Council and the Financial Services Roundtable in late 2011, 21 percent of small firms said that expanding into overseas markets factored into their business plans over the next five years. That number is indeed impressive, and represents a sea change in the collective mindset of U.S.-based small businesses.
Lack of knowledge about global markets and the exporting process, as well as perceived and real risks, are barriers to global expansion. Many small business advocates, educators and experts are working hard to educate entrepreneurs about the process and opportunities that exist overseas, as well as advancing policies in Washington that will open more markets and improve the export/import process.
One of those leaders is Laurel Delaney, founder of GlobeTrade, a firm that makes going global easier. Delaney just released her new book Exporting: The Definitive Guide to Selling Abroad Profitably. She is passionate about helping small businesses go global and joins us for this Business Success Strategies Q&A feature where she talks with SBE Council president & CEO Karen Kerrigan about her new book and offers general guidance for entrepreneurs who may be considering overseas sales and expansion.
Kerrigan: Based on your work with small business owners and entrepreneurs, what are the top reasons why they do not export?
Delaney: There are three big things: a lack of knowledge (they don’t know how to do it); they can’t find customers; and there is fear of not getting paid.
Kerrigan: How can entrepreneurs overcome these barriers, or a negative mindset that keeps them from going global?
Delaney: I’ve crafted a list of 12 key practices that help an entrepreneur become export ready, which are listed in chapter 31 of my book. A couple of those ways to overcome the barriers to exporting are:
• You must develop a global mindset. In other words, set aside time to think about and determine whether you are cut out for exporting.
• You must pick one core capability, either a product or service, to export. That one core capability should be something you love and will stay committed to at every step of the export process.
• You must develop your export dream team, which includes a good lawyer, a knowledgeable accountant, a savvy banker and a logistics expert, each of whom specialize in international transactions.
Kerrigan: How does an entrepreneur know if his or her business is “export ready?”
Delaney: What I have observed is that successful exporters have, or develop, a global mindset–the ability and courage to operate their business in an unknown environment. That mindset is critical to empowering a person to venture out in the world and adapt as he or she goes. Without it, it’s very difficult to take the first step to export.
In my book, I outline 12 characteristics that I find work in the export marketplace. These are based on my own hands-on experience and observations of others who have achieved success by crossing boundaries in the business world. Some of these include being comfortable and confident in your own skin, along with having a heightened sensitivity to others; carrying a high level of intelligence; and, enjoying living in different parts of the world and relishing learning a foreign language.
After you assess yourself on a personal level, you must determine if your business can benefit from exporting. The first step is to answer a series of questions listed in my book to receive an online score, which will help you assess your export readiness as well as identify areas that your business needs to strengthen in order to improve its export activities. You should not be daunted by the fact that you may not be able to provide an affirmative answer to all the questions. After all, that is why I wrote the book–to help people easily export in the digital age.
Kerrigan: How important are online platforms or ecommerce capabilities to the entrepreneur who wants to go global?
Delaney: Extremely important. It will become the primary way to conduct global trade in the future. In the digital age, customers from around the world should easily find you. And they can, provided you create a sustainable positive and powerful web presence. The secret to billions of customers finding you is to build a world stage comprising of a combination of social tools such as a blog, Facebook, LinkedIn, Google+, Twitter, Instagram and Pinterest, as well as cultivate a brand presence on a website, mobile apps and other online databases.
Using a proven e-commerce platform such as Amazon, eBay or Etsy is beneficial too, provided its visitors are in line with your ideal target market. Just remember that each of these platforms takes a percentage of the transaction profits and, in some cases, they even charge a monthly subscription fee. I always caution people to read the fine print when it comes to your costs.
After you test your products in new online marketplaces and enjoy significant revenue returns, it is then time to advance and create your own ecommerce platform to sell to the world and pocket all the profits. I talk about that extensively in the chapter, “The E-Commerce Connectivity Craze.”
Kerrigan: What are the first steps a business owner should take in selecting a market, or markets, for exporting?
Delaney: There are a variety of methods to locate the best–meaning the right–potential foreign markets for your product or service. There is a wide range of efficient methods to research export markets and get export-market data and intelligence. I outline those resources in chapter 12 of my book. But make no mistake, there is no getting around the fact that market research is not a tidy, linear process, so you have to get yourself organized first.
In deciding to concentrate your sales efforts, choose a market that intrigues you, presents a competitive advantage or offers a challenge and then consider the products or services you are thinking about selling there. If you start your market research and find there’s no demand for your product in the market you selected, you can always move on to the next market. But stick to your product because that’s what you manufacture, are comfortable with and knowledgeable about.
Kerrigan: Often times, there are cultural issues an entrepreneur should be aware of in countries where they want to do business. Why is awareness important?
Delaney: From a business standpoint, culture consists of many components–language, social interactions, religion, education and values–that create diversity among peoples and influence our expectations of what is appropriate. For any exporter, recognizing cultural diversity is imperative. The greater your commitment to expanding your cultural consciousness, the more comfortably and effectively you will function within business and social environments beyond your own borders.
But I caution: Don’t just go to another country, take care of business and come home. Confront the differences and let them affect and alter you. International travel is one of the most exciting, memorable and precious experiences that any of us will ever have. Use and enjoy the experience to cross your own mental borders and to develop skills in dealing and working with people from other cultures.
Kerrigan: How will your new book “Exporting – The Definitive Guide to Selling Abroad Profitably” help entrepreneurs who want to expand overseas?
Delaney: It will equip entrepreneurs and small business owners with the knowledge they need to market, sell and fulfill orders internationally, taking full advantage of the Internet and the opportunities it creates. It also imparts my own can-do spirit on exporting, which I hope leads to greater revenues, stability and profitability for your business.
With 70 percent of global buying power lying outside U.S. borders, exporting is not just an option for ambitious entrepreneurs–it’s an absolute must for building and sustaining a successful future.
Kerrigan: Finally Laurel, as you know Congress is considering giving President Obama “fast-track” authority (trade promotion authority) to negotiate and quickly move finalized trade agreements through Congress. How important are these trade agreements for small businesses?
Delaney: Very important. Free trade agreements (FTAs) improve foreign market access for exporters, promote economic growth, and create jobs. I recommend small business owners study active FTAs in advance of selecting an export market and preparing an export business plan to see how the agreement will benefit the organization. They must then factor that information into their decision-making process accordingly. For example, the North American Free Trade Agreement (NAFTA) is the FTA among Canada, the United States and Mexico serving to remove most barriers to trade and investment in that region.
A good resource to start your research on FTAs is my book, where I reference websites that cover trade agreements between the United States and other countries. The absence of FTAs can cause hurdles for a small business owner entering into a new overseas market. I want to protect businesses from any potential stumbling block right out of the gate.
For more information, please visit (and re-visit) Laurel Delaney’s award-winning blog The Global Small Business Blog.
SBE Council has endorsed legislation in the House and Senate to give President Obama Trade Promotion Authority. It is critical that the United States regain the leadership mantle on supporting and advancing trade agreements with countries and regions across the globe. Global trade has a profoundly positive impact on the U.S. economy, job growth and international competitiveness.