The South African market for many goods and services seems too small for some of our entrepreneurs. International growth offers abundant opportunities for ambitious business owners. For local SMEs, going global is a massive undertaking, but likely to disrupt existing business activities. Business owners must understand the impact of going global and decide whether the rewards will outweigh
1. Is there sufficient local traction?
Build success locally first. It Is advisable to have strong traction in the country where you are already doing business. If you are starting to hit a doublefigure growth rate monthly, it is more than likely you are ready to go global. It is essential your offering has a strong and unique value proposition to aid you in the acquisition of new customers.
2. Are you expanding for the right reasons?
The best time to seek international opportunities is when you are soaring high on a strong local business. Do not consider international expansion as a knee-jerk reaction to poor local sales. Be proactive in analysing exciting new opportunities abroad.
3. Think outside the box
Entering a new market might require you to adjust your business, product or service to suite the local market expectations better. Before exporting your goods and services consider brainstorming with your new potential customers and ensure your existing offering matches what they need and want.
4. Logistics
The more people involved in creating and delivering a product or service, the more risk exposure for the business. Create a supply chain that will lessen this risk as far as possible. Examine potential issues, work through various what if scenarios, and get clarity on their own suppliers’ operations by looking at the financial stability and wherewithal of their Tier 1, 2, and 3 vendors. Variability — the difference between what we expect from something and what actually happens becomes a key issue when doing business abroad. Within the supply chain, deviation from planned pro-duction, supply, and transit times can increase variability. Maintaining good supply chain visibility — tracking shipments as they move around the world — becomes difficult when multiple carriers, third-party logistic providers, and modes are used to transport goods across borders.
5. Tax laws for importing and exporting
International shipments sent from South Africa are subject to export laws and regulations. Businesses need to understand the shipping restrictions regarding products. They must also look at the political climate of a country. Is it stable enough to support successful business operations? Instability can slow down business operations. Look at the environment and whether it could affect consumer purchasing behaviour and partnerships. Political changes could create new import restrictions, tax controls and labor issues. Consider these before investing in an international operation. Taxes and currency values all play a part in exporting for businesses and, of course, their bottom line. Every country charges its own customs fees for importing and exporting goods. Get legal advice to determine whether customers are responsible for paying local fees, duties and taxes. Businesses expanding into foreign markets must know how much financial burden they are putting on customers and be able to clearly explain the fees. To conclude, although going global might be a daunting thought, breaking the process down into bite-size tasks will make it less challenging. And do thorough research and planning before starting the process.
Jason Newmark
Founder/CEO of The CES Collection, a group of companies that start and partner with expert businesses and companies to create a better future for everyone, by creating, educating and socially enhancing the lives of others.