In 2 previous entries, I touched first on the need to Get Executive Thumbs-Up and then to Analyze Market Horizons. What’s Step 3 on the checklist? Prove Demand.
Is the destination worth the time and resources? There has to be tangible, measurable demand for your products and services in international markets, which signals long-term revenue growth, which you’ve already quantified in step 2’s analysis. Are your solutions able to reach new markets in their current or altered form, motivate local partners, win new revenue?
Here is where time spent at industry fairs in your target countries will pay off. While I encourage you to make friends with local distributors and brokers — they are great at local networking, and can introduce you to trusted resources in banking, legal and logistics circles — I advise against signing ANYTHING resembling a distribution agreement with them, exclusive or not, for the time being. It is just too soon to go steady, and you want to protect your goods and services from sandbagging by nefarious competitors or those who intend to steal your intellectual property. Sorry if I sound jaded here, but I’ve seen this scenario play out more than once.
While planning your trip, don’t forget to enlist the aid of the hard-working team at the US Department of Commerce Export Assistance Center near you. Though they work for Uncle Sam, these people think like entrepreneurs, have global-scale rolodexes, and act with the sense of urgency that business owners can appreciate. Their services, many at no cost, include access to in-market studies for your particular industry, ranging from political and regulatory obstacles down to current and forecasted market growth based upon point-of-sale data from retailers and world-class research. Put your tax dollars to work for your business!
At this step, companies very often make the strategic decision to split product lines down domestic vs. international lines. Feature sets that are vital to winning international revenue — multilingual interface, for instance — may be of negligible value to your domestic customers. And once this happens, be certain that your operations, accounting, and logistics functions can handle it. More on that in future entries.
Next installment on the list: Allocate Resources.