International Business Is A Gold Mine
You Just Need To Dig
International business is a gold mine for entrepreneurs that know how to cash in on thisglobal trend. The global economy is fast becoming one integrated community. Theglobal economy is being driven by
Advances in telecommunications, and
Ease of travel.
International commerce is simply cross border trade and commerce between independent nations.International trade has been going on since the beginning of recorded human history.
What is new about international business is that it is now open to common, everyday peoplethat can get into this business arena with little or no capital, and limited means. TheInternet has leveled the global economic playing field all over the world.
In the past, one had to have vast resources to travel to foreign countries to conduct business. It normally took the blessing of the respective head of state and the wealthybusiness community in one's own country. While federal, state, and local governments stillsupport international business, it is now true that the average citizen can get into global commerce with relative ease.
In the United States the president, the secretary of state, the commerce secretary, and other high level cabinet appointees will get personally involved to support business effortsof common citizens. Government runs on the business community. Business commerce is theblood of government.
International business is basically just like business in your own local community except that in cross border trade you are conducting business at a distance. People do businesswith those that they know, like, and trust. In international business it is no different.
Global trade affects everyone all over the world. You no longer have a choice to be involvedin international business affairs. If you walk, talk, and breathe you are affected byinternational trade.
Citizens of the United States are extremely vulnerable to and impacted by international business. The current trade deficit for the U.S. in the year 2009 is somewhere in the area of $700 billion. Given economic trends in the U.S. and worldwide the U.S. trade deficit isexpected to grow over time.
Imports are goods that you buy from someone in another country and have them shippedto you. Exports are goods you sell to someone in another country and ship them to thatcountry for receipt.
Exporting builds one's own economy. When you sell goods and services to people in othercountries at a profit that increases your wealth.
When your currency value is lower than that of another country, that country is more inclinedto buy your goods because they are basically buying your products at a discount compared totheir own currency. For example, the euro (European Economic Union) currency value is atabout 1.5 euro to 1.00 dollar. One euro buys roughly $1.50 worth of U.S. products.
For a person in the European Union they can take 1,000 euros and buy $1,500 worth of U.S.goods. So, the euro holder gets the U.S. products at a 33% discount. Don't get caught upin the math or bogged down in the terms. Just know that when your currency value is lower than another currency you can sell products to people holding that other currency at a discount without reducing your product price.
If your currency value is lower than another currency value people in the higher currencyvalue country are eager to buy your products because they can get them cheaper than theycould buy the same products from someone in their own country. Hopefully, you can seethe opportunity here.
A declining U.S. dollar currency value opens up the flood gates for exports to countries with higher currency values. If you can produce goods with quality that other countrieswould want to buy you can cash in big.
Products with a per unit price that are relatively low that the average person can afford are prime opportunities for export. Information products like books, CDs, video recordings,etc., will sell very well across borders without having to do any travel or communicatedirectly with the buyer in a foreign country-made possible by the Internet and internationalshippers.
Products with a low, affordable per unit price are ripe for export. You can do exportingthis way relatively easy.
If you want to set up manufacturing operations or foreign subsidiaries in other countriesthat will take some travel to and investment in the respective foreign country location. Tomake a long story short to do international business this way you will have to get to know,like, and trust people you are going to be doing business with in the foreign country ofchoice.
Business networking in your own country to find contacts or trustworthy business people ina foreign country of choice is one way to start. Another way is trade shows.
Trade shows are an excellent way to get to meet people in your industry and/or product line.Trade show organizers in your country, in the U.S. for example, will put on a trade show ina foreign country to introduce U.S. business people to potential foreign buyers and businesspartners.
You can plan a vacation around a trade show in a foreign country. Trade shows normally onlylast for about two to three days. The rest of the time can be yours. You can go initiallyas a visitor rather than purchase a booth. However, if you do purchase booth space planahead, at least six months in advance.
Strong advise to business people in America seeking to do international business is to
#1 Learn the language of the host country, and
#2 Adapt to the culture and customs of the host country.
You have probably heard the joke,If you know three languages you are tri-lingual.If you know two languages you are bi-lingual.If you only know one language you are an American.
There is some truth to this humor.
Prior to setting up operations in a foreign country you need to do a research study calleda "country analysis." This is a part of a foreign operation business plan that examineseverything with respect to doing business in that country. It includes research on
- The political system and its stability,
- Laws and particularly tax laws,
- Currency values and their fluctuations,
- Language and customs, and more.
A country analysis research study will tell if a particular foreign country is a good place toset up a foreign business location. You can do this yourself using resources availableon the Internet. Of course, any written, hard copy reference materials you can find will behelpful.
Asian countries, particularly China, are emerging as economic powers. Japan is no longerthe sole Asian country with economic strength. Doing business in Asia takes major adjustments by Americans to their way of doing business.
Asians have what is called a "high context culture." This means that meanings of words,phrases, language terms, customs, culture, relationships, and more are determined by thecontext in which they are used. This is also true in Africa and the Middle East.
The affect that context has on doing business in Asia means that you will have to take itslow. Your Asian counterpart will want to use the first visit to get to know you and yourfamily personally. They will want to have tea and make jokes.
An American will want to go and "kick ass," and come home with the prize. Well, the realworld works much different. Expect to socialize on your first visit to an Asian prospectivebusiness partner. If you push for the order on the first visit you will most likely encounterresistance.
Doing international business can be lucrative. You have to take it slow and do the rightthings. In the end you may still encounter risks. Political governments can change overnight. Foreign governments can appropriate (take away) all your property if your homegovernment and the respective foreign government have hostilities.
If you have a passion for your product, and you strongly believe that people in foreigncountries can improve their quality of life with what you offer you should considerinternational business as an option. You may find a warm reception.
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