Why expand globally? Some of the reasons include 1) faster growth, 2) access to cheaper inputs (raw materials and labor), 3) new market opportunities from a vastly bigger customer base, and 4) diversification—less vulnerability to changes or events in specific regions when the company is dealing with a number of regions of the world.

Conversely, what are the risks? 1) increased costs, 2) the need to meet Foreign regulations and standards, 3) cash flow woes due to delayed methods of payment and 4) operational complexity, and 5) failure to understand local business norms and customs, to name just a few.

The landscape is littered with the debris of otherwise great companies who’ve made international business mistakes. Here are just two of the many examples (from Kwintessential, in the UK) – A company printed the “OK” finger sign on each page of its catalog, only to discover afterward that many parts of Latin America consider the sign an obscene gesture.  The company lost six months of work while all of their catalogs were being retooled. In another case, FedEx (Federal Express) chose to expand overseas when its domestic market was saturated. The “hub and spoke” delivery system that was highly successful in the U.S. worked well in China, but turned out to be completely unsuitable for European distribution. Cultural differences were problematic as well: Workers in Spain preferred very late office hours, for example, while workers in Russia were taking truck cleaning soap home due to shortages in consumer supplies. The result? FedEx had to close more than 100 European operations after enduring a $1.2 billion loss.

For help in navigating the global arena more safely, I’ve turned to an international specialist we know well—my agency’s client MultiLing, a Provo, Utah-based company that enables global commerce through highly specialized IP and technology translations to more than 80 languages.

Since 1988, the company has been serving clients such as Procter and Gamble, IBM, Seimons, Tyco and Dell. MultiLing is growing rapidly. At the open house event for its most recent expansion, MultiLing executives and guest experts shared the following tips for doing international business well:

1.  Match your approach to your business model and purpose. MultiLing CEO Michael Sneddon notes the importance of evaluating in advance the objectives you intend to achieve in each new region of business. Is it more customers? Lower costs of your supply chain and operation? Those answers will influence every aspect of the arrangement, from office location, to staffing, to the model of operation itself. The company has been most successful with its own international efforts when it matched the business model to the expansion well in advance of the actual move.
2. Do sufficient homework in advance. Lyle Ball, MultiLing COO, points out that many aspects of an international move will unveil themselves as you study them out personally or as you find key partners who can help you net out key issues region by region in advance. For example, when MultiLing set up business in China, it worked with connections it gained through its German subsidiary in the Munich metropolitan area. The company went in with the help of the Office of Economic Development of Bavaria and the German Chamber of Commerce, a specialized quasi government group. MultiLing also used a specialized consulting firm to assess the best location for its Chinese subsidiary. These allies were able to provide help that was free or extremely economical that proved to be vital to effective international moves. Quinn Sutton, general manager of Latin and Carribean regions for digital literacy and certification firm Certiport (and a guest speaker at the event) also agrees with the role of full preparation: “Research, research, research,” Sutton says. “Talk to people in the region you’re moving into who will be in the know. Validate your assumptions on the Internet. Take advantage of resources such as the US Chamber of Commerce, which can serve as a fantastic resource for companies planning to expand their business abroad. They can make introductions to the right service partners for you, and they can be highly cost effective.”
3. What about manufacturer’s reps? These organizations are already set up in country and can set up contracts to conduct international distribution and sales on your behalf. For some companies, a manufacturer’s rep can eliminate overhead costs and risks and can be extremely helpful, says Todd Rapier, MultiLing’s executive vice president of worldwide sales. However, you lose a great deal of control when you employ a manufacturers’ rep, Rapier says. That individual and company represents you. You are also dealing with a biased advisor whose advice may be influenced by the factors that affect their personal income and their own organization’s goals and desires, Rapier added.
4. When should you localize your product? It depends on what you’re selling, Sneddon says. In some situations, your decision may be influenced by government requirements. In other situations, you may be selling to an expert group that has excellent competency, you may not need to localize right away. In general, however, if your product will be sold directly to consumers, the market penetration will be far greater with a product that is fully localized to their language and to their specific concerns (for accounting or inventory software, for example, adaptation to the country’s currency and shipping requirements would be an essential concern.)
5. Choose the right translation partner. MultiLing’s specialty is highly technical content such as patents, contracts, technical materials and the materials that are essential to online technical support. The company notes that for some kinds of materials, machine translation or generalized support may be sufficient. However, for many kinds of materials, full “localization” will require localizing the meaning and the presentation of materials as well as accurately translating the words. Specialization is especially critical for patent translations—for a large corporation, for example, when $2 billion is invested in research and development, the speed and accuracy of patent protection in international countries is a critical key. For a smaller merchant working to gain additional market presence for non-patented product, the requirement for specialization would perhaps be a little lower.
6. Be highly aware of your international brand. Sutton points out the high importance of maintaining a central corporate identity and brand across all international regions. While consistency is important, international business can affect even such seemingly innocuous decisions as colors—the color the represents purity in your native region might mean something entirely different in another part of the world.  “If you simply announce ‘This is the way it is’ to your international partners, your success will be as limited as your vision,” he says.

So are you really ready for an international business? Only you can decide. But if executed properly, many businesses have successfully increased their business by 60%—or more—within the space of just 3-4 years. The potential is high.