Is it worth doing business abroad?

DR. KLIPPE Consult shows you that it is worth the effort to start your activities abroad now. Read why it can be worthwhile for you too to go international.

1. The markets of tomorrow are not developing in Europe

The living standards in Western Europe are among the highest in the world. This is still the case, although it is unsustainable by traditional means. It is becoming more and more difficult for the successes of yesterday to be repeated again today. Barely 500 million people live in Europe, whilst in Asia there are already 3 billion. The average age of a German is 43 years old whilst the average age of a Vietnamese, Filipino or Malaysian is only around 24 years. In comparison with an ageing European society Asia has a very young population on the lookout for growth and prosperity. Germany and Europe have the products for this!

2. Company size isn't everything

Small and medium-sized enterprises (SMEs) are the pillars of the local economy. It is wrong to state that you have to be "big". "Being big" also means "having big costs". It is precisely the smaller company that can find it easier to gain a foothold abroad. SMEs are more flexible and are in a better position to adjust to the constantly changing conditions. Even the high costs of sales and marketing can be managed by joining forces with other companies, likeminded enterprises or strong partners.

3. Increased returns are often misunderstood

What options are there for maintaining or improving returns? You know the story: turnover is too low, costs are too high. That must mean then: all activities should be put into sales. First of all though, this doesn’t create new revenues, but only produces costs. If you lower costs in the sales area then you take away the only possibility there is to increase turnover again. Competition has become tougher in the meantime. Sitting it out is not sufficient by itself. Try to maintain returns and to think in the long term. You need this kind of long-term thinking for activities abroad because long-term involvement and dependability do get rewarded. For this reason, should you risk not taking the “first step”?

4. What does a bratwurst have to do with the choice of country?

There are many markets that are of interest: the EU, Eastern Europe, South America, the USA, Canada, parts of Africa, the BRIC countries, ASEAN and Asia. This is really difficult though for anyone who has never left their federal state, even when their product is outstanding. Those that already operate nationally throughout Germany are already aware of the regional differences. Someone else who operates in the German-speaking business world knows that Germans, Austrians and the Swiss, and also the Dutch, who often speak very good German, each have extremely different business practices. But all countries have one thing in common: they're only active because there's a market for them there. It is important therefore to decide first of all where your target markets are. It’s very probable that you won't even know many of these markets. "A bratwurst seller cannot know every farmer's or Christmas market". But successful salespeople do know the best markets. And the best markets are those that provide the right turnover, and where the costs are calculably lower and projections for growth positive.

5. Should I "go international"?

For companies offering products or services that can be exported the question should no longer be "whether to go international", but rather "when will they finally take that first step". Anyone wishing to make their company fit for the future must position themselves internationally.

6. How do I go international?

How do I approach these types of markets? How do I establish a successful sales organisation? How do I find business partners? When should I go to trade fairs abroad? And how should I behave there? What do I do if someone wants to do business with me there? Just remain steady and keep your nerve: "step by step". The motto goes: before you spend money on an air ticket, your strategy should be in place and your company goals regarding activities abroad should be clearly defined.

7. "Going international" – conclusion

High-performing SMEs that go international strategically can take advantage of unique business opportunities with enormous growth potential. Company size only plays a minor role in this. The key to success is "how you proceed".

© DR. KLIPPE Consult 2010