Going Global on a Dime: The Entrepreneur’s Handbook to Tapping the Global Marketplace
by Lauri E. Elliott
Published by Conceptualee, Inc. at Smashwords
Copyright 2011 Lauri E. Elliott
Discover other titles by Conceptualee, Inc. at Smashwords.com (https://www.smashwords.com/profile/view/afribiz).
This ebook is licensed for your personal use only. This ebook may not be resold or given away to other people. If you would like to share this book with others, please purchase an additional copy for each person. If you’re reading this book and did not purchase it, or it was not purchased for your use only, then please return to Smashwords.com and purchase your own copy. Thank you for respecting the hard work of this author.
Other resources for going global can be found at:
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http://www.afribiz.info
http://www.goingglobalonadime.com
Table of Contents
Chapter 2: The Going Global on a Dime Process
Chapter 3: Opportunities and the Business Environment
Chapter 4: Managing Intellectual Property
Chapter 6: Leveraging to Take Advantage of Opportunities
Chapter 7: Powering Your Own Going Global Network
Chapter 8: Leveraging Trust Networks
Chapter 9: Designing, Planning, and Implementing a Going Global Project
Chapter 10: Conclusion and Key Points
Appendix B: Questions for Country Profile
Appendix C: Questions to Flush Out Going Global Context
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Preface
The idea for Going Global on a Dime came after living and doing business in Africa (a region considered one of the most difficult to do business) successfully as an entrepreneur. When I returned to the U.S. and shared my experiences, one of the main messages I kept hearing from others was that they weren’t empowered to do business globally. The reasons ranged from capacity to finances to connections.
While these issues are valid, I discovered that getting what I didn’t have was not the answer, but using and leveraging what I did have made all the difference. Today, it’s not what you own or have control over that determines whether you have the capacity to succeed globally, it’s also what you can tap into – other people’s expertise, resources, and connections.
What I focus on in this book is demonstrating pathways that many entrepreneurs can follow to enter and be successful in the global marketplace. There is no formula for success. It will hinge on your ability to discover and implement a unique pathway, shaped by the strengths you are able to leverage.
The name for the book comes from the entire approach to going global that my strategic partners and I have learned over the years. If you shape your global opportunity correctly, you will find that you spend 10% of what is normally spent to do so and you can leap at least ten steps forward for every one step you take in this new era of global entrepreneurs.
The Going Global on a Dime approach has many elements that you can employ to shape and structure a strategy for going global. This book focuses on providing a framework to go global in 12 to 18 months. It won’t answer every question, but it will give you a clear framework to use as you find your own unique path for global success.
While I would be gratified if everyone read this book, it is not for the faint of heart. It can only help you if you can tap into the power of being an entrepreneur.
I look forward to sharing the going global journey with you.
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Foreword
“The emerging movements towards economic self-reliance will not be led by political action but by digital technology and creative entrepreneurship.” Ron Watkins
Small businesses and entrepreneurs have a well-earned tradition and established track record for being major change agents in economies around the world: creating millions of new jobs; spearheading innovative and cutting-edge technologies; developing new and futuristic, first-to-market opportunities; and advancing the next generation of new business models and market strategies. Another advantage is that small businesses and entrepreneurs are normally less bureaucratic and depend more on personal interactions. Many small businesses continue to consider themselves to be social entrepreneurs - a characteristic that will serve them well in many emerging markets where some business cultures might be more focused on personal relationships than more formal business structures and protocols.
There is no doubt that enterprising entrepreneurial industries will continue to lead the way for prosperity and sustainable economic growth in this global economy.
The nimble and flexible nature of small businesses, coupled with the rapid advances in technology - instant global communications, faster modes of transportation, secure electronic trading platforms, etc. - has positioned small businesses to be the dominant global players in the 21st Century. However, even with all of these fascinating push-button technical capabilities, it would be a serious mistake to overlook the consistent need for the necessary managerial expertise, the crucial cultural knowledge, and the critical social skills that are essential to our success in our chosen markets and ventures - machines don’t do business, people do.
This era of the global entrepreneur excites. So, when my good friend and colleague, Lauri Elliott, approached me about writing a foreword to her book I was extremely pleased to be able to make a small contribution to this very timely and worthy initiative. As an international trade consultant and strategic advisor on global business, I can sincerely appreciate the value of Lauri’s hard work and dedication to this endeavor. Over the past decade or so, she has proven to be one of the most visionary evangelists and promoters of the entrepreneurial spirit; a strong advocate for free and fair trade; and a leading voice for leveraging innovative enterprises as a catalyst for creating prosperity and sustainable economies and communities across the globe.
For small and medium sized business owners and entrepreneurs that are exploring the possibilities of, or planning on, going global and for the many novices out there that are just curious to know what all of this international trade talk and “globalization” media hoopla is really all about, this book provides an excellent framework for often overlooked informal and social processes associated with going global rather than the technical pieces found elsewhere.
Although primarily written for new to market small businesses and entrepreneurs, seasoned global business practitioners will find that this book provides a refreshing summary, and some unique perspectives, on navigating the opportunities, challenges, and nuances of doing business in today’s highly complex and competitive international business environment. Lauri delves into the mindset and strategies that should be considered and leveraged to successfully engage in the diverse political, cultural, economic, and social environments of the global markets.
Lauri goes beyond the “how to” basics of international trade. She selflessly shares her hard earned hands-on knowledge, her intellectual capital, and her professional insights on several important issues that are normally not addressed by other authors, such as the cultural and environmental aspects that should be considered or assessed for doing business in highly competitive international markets. In addition, to enhance the potential for sustainable and profitable overseas ventures, she takes it to the next level by concisely outlining some of the business models, enterprise strategies, resources, and leverage points for successfully accessing opportunities and performing in these markets.
Needless to say, long ago Lauri saw the handwriting on the wall while most small businesses and entrepreneurs were still convinced that they more or less had an exclusive on their local or regional markets. She was very much aware that those “local” markets were increasingly challenged by intense global competition from newly emerging markets for goods, services, customers, and brand recognition. Under these circumstances, this book is a very timely and well overdue resource for all of us that are convinced that global entrepreneurship is truly “the next big thing.” The phrase, “think locally and act globally,” has never been more relevant to the small business community.
Most of us have heard that business is a form of economic warfare, and ready or not the intensity and increasingly competitive nature of the global economy has come to bear on each and every one of us in one fashion or another. It might be way too late now for basic combat training, but Lauri has graciously armed us with the commander’s field manual with practical guidelines that we can immediately put to use to facilitate our presence and enhance our performance in the global marketplace. This is her version of “The Art of War.”
Shelvin G. Longmire
Chairman
Center for Global Entrepreneurship and Enterprise Management
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Chapter 1: Introduction
by Shelvin Longmire, Center for Global Entrepreneurship and Enterprise Management
Whether you’re interested or not, you are part of the global economy. When you go to a Wal-Mart, or your local retail outlet, the goods you purchase are made elsewhere. We are all a part of the big picture called the global economy. Once you absorb this as part of your mindset, the idea of doing global business is not such a foreign concept.
Large firms and multinational corporations are thriving in the global economy. In regions like Africa and Asia, firms are experiencing returns on investment exceeding 30%. But the global marketplace is not just for the big boys, it’s for people like you and me – entrepreneurs and small business owners.
In fact, there are tremendous opportunities for entrepreneurs and SMEs in emerging market countries waiting for someone like you to take advantage of them. Instead of finding too few opportunities, people get overwhelmed with the sheer number of them.
There are so many opportunities because these markets are growing. While Western developed nations will experience growth less than 3% annually for the next several years, countries like China, India, Ethiopia, and Ghana will grow at more than 7% per year. Ghana’s growth is projected to be close to 20% between 2011 and 2012, according to the World Bank.
They are expanding, and they are in need of just about everything. They are open to everyone, but they require strong people with entrepreneurial spirits, as well as those who will venture out – pioneers, adventurers, and explorers. Or at least people, who will work with people and organizations with these characteristics.
Why does going global require these characteristics? Any business presents challenges, but global business brings a whole new set of issues that you have to handle well to be successful.
The first type of challenge is market entry issues, such as time and distance. Time differences and travel expenses can be a hindrance, but advances in technology today are shortening these gaps.
You also need to consider the suitability, or adaptability, of your product in the foreign market into which you are introducing it. Just because a good or service sells well in your country does not guarantee that it will find success in foreign markets.
Another consideration is will the good or service be offensive to a foreign culture (e.g., in the Middle East which has strict cultural norms)? Also, how does the product’s name translate literally into the local language? It is not uncommon to change the name of products to appeal to foreign, or global, markets.
The next market entry issue is lack of adequate infrastructure (e.g., roads, electricity, telecommunications). This can impact another market entry issue, which is getting your product to the market. In other words, there can be challenges with transportation, logistics, and supply chains.
The second challenge type is environmental factors – climate, geography, and ecosystem. If you are trying to sell frozen food products in a desert country where freezers are a luxury, then you may want to rethink your game plan. If you are planning on setting up a manufacturing operation in a rural area, you will need to assess the infrastructure and roadways - they will be key to your operation. Many rural areas may not have roads that will support heavy traffic from heavy machinery, though sometimes nearby rivers can be used for efficient transportation.
The third type of challenge relates to business culture, customs, and protocol. It is not uncommon that business practices are informal and lack standard procedures, which can make it very difficult to navigate business in the foreign market. Some emerging markets, as far as their business practices go, are probably at the same place Western markets were over 75 years ago. Goods are often sold in open markets in the streets of even the largest cities in developing countries.
Bureaucratic institutions, inadequate regulatory environments, and political influence over commercial transactions are also issues. But, corruption seems to be the most talked about obstacle, and in some developing nations, is very rampant. Often, people and institutions in developing countries have different perceptions on what defines bribery and corruption. This is something of which you need to be cognizant.
If you are from a Western developed nation and operate in another country, you can find yourself in trouble over certain business practices. These business practices may not be illegal in your host country, but are in your home country. If you are a U.S. citizen, there are very strong laws that govern being involved in bribery and corruption overseas. For example, if you have to pay somebody on the side to get a contract or to get your product cleared through the port, these practices are considered to be unacceptable under U.S. law.
So, if there are so many challenges, how can a small business or entrepreneur like you make it? First, do your research. Before doing business anywhere, whether abroad or domestically, it is important to know as much as you can about the market that you are entering. This is even more pertinent when you are doing business in an environment with which you are not familiar.
Before you even travel to the emerging country in which you plan to invest, it is important to do your homework. Fortunately, if your home country is a Western industrialized nation, you will typically find general market research and information made available through your government. In the U.S., information is available on almost every country in the world. (See list of resources in Appendix A.)
Find out what the political environment is. Is there political stability there or civil unrest? Is the leader of the country pro or anti business? Is there a pro or anti sentiment amongst the population concerning your home country? How prevalent is crime? Will you need to hire private security?
You will also need to know how to deal with local bureaucratic regulations, starting with whether or not you can even do business there. You will also need to look into import, export, and business licenses. It will also be important to get familiar with their regulatory standards. This can all seem a little overwhelming, that is why it’s a good idea to take care of as much of the paperwork as you can at home, that way you can hit the ground running once you travel to your new place of business.
When it comes to your interactions with the local government (they may seem unorganized and informal), keep in mind that they do have a system. Be persistent when you have to, but be careful not to be rude.
Another step to set yourself on a course for positive engagement is to learn about the culture and language. Even if you only learn the basics of the language, enough to get around town, it will show the locals that you are willing to learn and are open to things that are important to them. Even if you do not plan on visiting immediately, demonstrating a desire to learn more about the people and country you want to enter can go a long way once you get there.
At this stage, you probably don’t see a clear path of how you can go global. You are feeling what many of us who have done it felt, and still feel at times. There is no formula for being successful in going global, but there are strategies and tactics you can learn that will carry you a long way. And for me, the key strategic advantage you can create for yourself is to form the right partnerships.
As a small business, you should partner with a company, either foreign or domestic, that already has established itself to some degree in the market you are looking to enter. While you will build partnerships elsewhere to take advantage of a particular market, you must have local partners. You have to have people that understand the politics, culture, language, and nuances of doing business on the ground in your host country. If you are visiting the country, it is important to have a close partner or someone that you trust as an interpreter when you are talking business.
We also need to keep the proper perspective on forming partnerships. Western businesses, particularly those from the U.S., expect things to be done within a certain time frame and done a certain way. In informal markets, time issues require a lot of patience. You may end up taking several detours before you are able to get some things done. Whether or not you get something done generally depends on the relationships you have built with the people with which you are dealing. Building a strong relationship with someone does not happen overnight. It will take time to develop relationships, time to manage them, and time to get the results that you want from them. Once your relationships strengthen, however, you will have extremely valuable allies.
Once you have a firm grasp on the fact that you will face challenges and that the cornerstone for your going global efforts needs to be partnerships, you will find there are many paths to help you take advantage of opportunities as you will have many more options, capabilities, and channels through those partners.
You can now look at what other strategies and tactics will help you go global. My first step is to look at what strengths, tangible or intangible, I possess that will carry me forward. They can be as concrete as cash or as esoteric as, say for example, the image of American products abroad. In this example, in pro-American markets where the image of American products is reliability and quality, you have an edge. However, you need to understand that it’s not typically a single advantage that makes you successful; it’s how you combine your strengths that can set you apart.
Another way to improve your efforts in going global is to focus on industry opportunities and strategies. Transferring technology to foreign markets, as long as it meets certain requirements dictated by individual countries, is a great way to do business in other countries. If you have new and innovative services or other products you think are marketable overseas, then do it!
You can also look at franchising opportunities. If you already have a business that would make a good franchise, you can contact organizations, e.g. the International Franchise Association[1] in the United States, that help franchises go global. The other route is to find franchises that are looking to enter global markets and take their franchise business model to another country.
Also, look at the agreements your country has with other countries that make unique importing, exporting, and global business opportunities and platforms. This path may reduce the challenge of getting your goods and services into another country.
There are also market entry portals that serve as “open doors” into other markets. One great option you have is commercial subcontracting. This is where you identify another company from your home country that is doing business in a specific industry and country and looking for partners or subcontractors. This happens a lot, especially in industries like oil and mining.
Other market entry portals include international development, governmental, and non-governmental institutions, such as the World Bank and regional development banks. If you are a U.S. company, the U.S. Agency for International Development (USAID)[2], United Nations (UN)[3], U.S. Trade and Development Agency (USTDA([4], and the Millennium Challenge Corporation (MCC)[5] are great places to inquire about possible contracting and supplying opportunities overseas. In other highly developed nations like the U.K., you will find similar organizations.
You can also look to private sector channels like chambers of commerce and business councils. You can contact chambers from your home country that have branches or affiliates in foreign countries. For example, the U.S. Chamber of Commerce[6] has affiliate chambers in every region of the world.
Also, as eager as you may be to explore foreign markets, there are others who want to tap Western markets like the U.S. You can take advantage of this by forming a two-way trade partnership. This way you can partner with a business savvy person in a market of your choosing. While you help them get established here in the U.S., they can help you get established in their country. You can make contact with firms like this through embassies[7] and chambers of commerce.
As a final note, something also must be said about how you should do business in another country, particularly developing countries. While you want to make a profit, you must also consider people and the planet, this is called the triple bottom line. A lot of people in emerging markets have been treated poorly and taken advantage of in the past, exploited by foreigners who extract resources from their land and then leave. Developing nations don’t want you to come to their country and just sell a product or service, they are looking for mutual partnerships in which you bring value to them as you are getting value from them.
There are many ways in which you can approach this issue. For example, you can help by manufacturing the parts to your product in your home country, but assembling the product in the market in which it will be sold. This helps develop the local economy in the developing nation. This will also help you build strong relationships within the community, and people will look out for you.
I encourage you to go global. I encourage you to get out there and capture your share of that 95% of the world’s market that’s out there. If you’re going to grow your business, if you’re going to become a more profitable enterprise, if you’re going to expand your horizons, then going global is definitely the way to go.
Conclusion
Going global with your business is not an easy thing to do and can seem like a daunting task to even veteran entrepreneurs. You are up against market entry challenges, environmental challenges, and challenges pertaining to a different business culture, customs, and protocol.
There are people willing to help you though; from your local government to the people with which you will form partnerships to the many different market entry portals available to you. By practicing thorough due diligence, being patient and flexible, you can find success in the global marketplace. And when you do find success, be mindful of the people and the community that helped you achieve it.
Bio of Shelvin D. Longmire
Shelvin D. Longmire is a Washington, DC-based strategic advisor and international consultant specializing in global enterprise management, international business development and market entry strategy, corporate intelligence, and commercial diplomacy and protocol. His areas of expertise also include facilitating international business linkages, joint ventures, and strategic alliances in emerging markets.
Mr. Longmire also serves as the U.S. Director of the Montreal, Canada based international business consultancy and media relations firm, Afrique Expansion, Inc. He has served as a senior project manager with the Northrop Grumman Corporation. Following this, he was the U.S. managing director of an international charter airline that provided customized flights between the U.S., South America, and Europe. And after this, he was vice president of an entrepreneurial information technology and management services firm.
Mr. Longmire serves on the board of the Tri-County International Chamber of Commerce, the African Business Club at the Howard University School of Business, and the American-Nigerian International Chamber of Commerce. His other affiliations include the Center for Global Entrepreneurship and Enterprise Management, the Center for Global Leadership at McDaniel College, and the Academy of International Business.
Mr. Longmire studied political science, international relations, and business management and earned his degree from Troy University. He also holds certifications in Global Business Strategy from Georgetown University and in Global Entrepreneurship from the Thunderbird School of Global Management. He is also an alumnus of the U.S. Foreign Service Institute, the Defense Intelligence College, the Armed Forces Command and Staff College, the U.S. Army Management Engineering College, and the U.S. Air Force Special Operations School.
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Chapter 2: The Going Global on a Dime Process
Going global means different things to different people. International business is simply when individuals or firms conduct a business transaction between different countries. International business is divided into three main areas – income, investment, and trade – according to the International Monetary Fund (IMF)[8].
Income involves return on investment and earnings for creditors, shareholders, and employees. For example, interest payments on debts spanning different countries are income.
Investment involves either direct or portfolio investments. A direct investment is when an investor sets up or acquires, in part or in full, a business in another country. A portfolio investment is investing in financial instruments, either equity or debt.
Trade is when international transactions involve goods or services. Exporting falls within this category. The trading process generally involves three steps: (1) buyer and seller interact before contract, (2) buyer and seller negotiate and sign a contract, and (3) the contract is completed and enforced.
The Going Global on a Dime (GGD) process focuses on doing business in a foreign country more than trade or investment. However, the process and information in this book are still useful for anyone considering any type of foreign transaction.
My experience with going global was the opposite of the path recommended - build domestic capability before considering going global. I packed up and moved to a foreign country to start something new. In truth, there are a lot of pitfalls in this approach, but I quickly learned how to navigate global business opportunities with very few resources. Out of these experiences, and those of others, comes the GGD process.
The GGD process is not about going global and spending no money, but about how to leverage the cash, and other resources, you have to go global. It uses the principle of “use what you have in hand” versus waiting for the windfall that never seems to come.
One of the major reasons small businesses and entrepreneurs give for not going global is not having the money to do so. There has to be a major shift in your mindset, in this regard, for you to tap global markets as an SME or entrepreneur. In most instances, there will never seem to be enough money. Money should be your last consideration for going global, not the first.
In fact, going global is not so much about tapping your own resources, but tapping your resources and those of others. This is what powers your ability to go global.
Another common misconception is that you have to have a successful domestic enterprise before you can go global. While this is good, practical advice because it is something you can leverage, today firms are being born global. That means they go global within two to three years of their creation. Firms are being designed from scratch to take advantage of opportunities wherever they may be found – domestically or globally. This is the framework you want to have for your own enterprise no matter at what stage of development it is.
Admittedly, the going global process is intense, filled with barriers and issues. However, you will find workarounds so that you can go global just as others have done. As with any business venture, you have to be committed, persistent, and innovative.
The first thing you will need to do is a reality check. While there are innumerable opportunities globally, particularly in emerging and frontier markets, you need to know that the process of going global, or being in business globally, is complex. For example, you now need to keep track of laws and regulations in at least two countries.
The best step you can take to start is to get educated about global business issues and the environment. The GGD process focuses on the strategic and practical framework that you can take to go global, not the technical framework or the background. You will find hundreds of sources for this aspect. Three good sources to start are globalEDGE™[9] at Michigan State University, U.S. Export Assistance Centers[10], and local institutions like universities and colleges and chambers of commerce that have international business programs specifically designed for SMEs and entrepreneurs.
After you have gained sufficient knowledge about going global, you then need to assess where you are in terms of readiness. If you are exporting, globalEDGE™ provides the CORE software program, which assesses your organizational and product readiness for exporting. globalEDGE™ may charge a fee, but you can download a similar program from Bradley University’s International Business department[11] for free.
You will come away with some basic steps you need to do, such as putting together a company profile and setting up a website. Do as much as recommended that you can, so that you are prepared to do business when the opportunity comes. This only applies if you have an existing business with products and services.
If you are coming up with a new business idea, you will not be able to do as much but you can at least make sure your company is registered, has basic business licenses, and has a bank account. You will, however, have a checklist to refer to in the future as you develop the new business venture.
While this educational process is important, many SMEs and entrepreneurs come away feeling like they have the information, but still cannot go global for various reasons. This is where the GGD process is applied – to help you look at what you have in hand, learn how to move forward to go global with what you have, and implement a first-stage venture abroad.
Before getting into the GGD process though, we need to look at a few key perspectives that will be important to you – unique competitive space, key entrepreneurial tactics, and value creation.
Important Perspectives
There are some perspectives which you will need to understand to put the GGD process to use for you. The first perspective is unique competitive space. Unique competitive space (UCS) is the space for which you are uniquely designed to create value, which inherently gives you a competitive advantage over others. As an entrepreneur, you are wired to succeed in a particular market space. It is your journey to find out what that space is and fully develop it. In fact, there is a UCS for every single person, whether or not he or she chooses to be an entrepreneur.
This insight reveals a shift in a scarcity market mentality to an abundance market mentality and the nature of competition. If everyone has a UCS, this means there must be an abundance of markets to tap. And in your UCS, you are expected to dominate and lead your competition while at the same time work with other people in similar spaces (co-opetition) to leverage opportunities for everyone involved.
So, what does this mean for entrepreneurs in these new paradigms? Let’s start with a description of an entrepreneur.
An entrepreneur is a person who creates things based on his or her uniqueness. We are all creators; therefore, we are all entrepreneurs (whether or not we choose to identify with this role).
In business, entrepreneurs create value to create wealth while serving others. The process of creating value starts from the inside (the spirit), then moves to the mind (soul), and then is executed (body). Every good business venture will start with what you create from within you and make tangible. The best business ideas do not start with externalities.
While people are innately creators, or entrepreneurs, they have to choose to live the life of an entrepreneur. This life is a journey not a destination.
Entrepreneurs in this space also understand that making the most of our unique competitive space is more about serving others than ourselves. How well we serve measures our degree of success.
The second perspective is value creation. Every economy is based on the process of creating value, taking a raw resource and transforming it into something of greater value in the eyes of the consumer. For an entrepreneur, this means you take raw components, elements, and knowledge and create unique products and services. When your product or service becomes valuable enough and you offer it at an affordable price to consumers, they will pay you for it (although there are other factors which also come to bear).
The value creation process starts with the business idea, which is a seed planted in your spirit. As you cultivate or nurture these seeds, they become plants. These plants start as sprouts and transform to fully formed plants, e.g., corn. Once the plants have matured, they produce fruit (value) with new seeds (new ideas, business ventures, products, etc.). The new seeds (ideas) produce more plants which produce more fruit (value) and seeds, so multiplication occurs. Multiplication continues until value overflows back to you.
It is the same for a business idea. The idea is transformed into a product or service which people purchase. This leads to more products and services, as well as sales, leading to not just revenue but profit with the right business model.
This analogy also teaches you something important about a new business venture. It cannot produce fruit (value) until it has matured enough. Many entrepreneurs have great ideas but never develop them enough to bring value to customers, so the potential dies on the vine. This is the difficult upfront process any entrepreneurial venture faces. It’s important for entrepreneurs to continually re-work the business model to work for the customers and themselves.
The third perspective is key entrepreneurial tactics for taking advantage of the GGD process. The following entrepreneurial tactics are those we have found to help us leverage our opportunities:
Serve and seed others – help your customers and even other businesses succeed. It helps build the ecosystem you will need to support your own venture.
Identify and keep your core principles and values – Brian Klemmer offers a good set of core values to follow in the “Compassionate Samurai.”
Live and operate in the abundant entrepreneurial worldview – recognize that there are opportunities out there just for you and pursue them.
Focus on creating value first, not making money – the flaky financial instruments of the global economic crisis demonstrated why. Things with no value will eventually die out and cause destruction. Money comes as a result of having something of value to exchange.
Be a warrior – keep at it. You will need to push forward on your own steam; others will not do it for you. Be bold, strategic, relentless, and flexible.
Use what you have – do not focus on what you don’t have. Put to use what you do have.
Seek knowledge and learn – you will fall behind if you rely on others for your information. Become an expert in your unique competitive space and put it to use.
Collaborate with others – do not be tempted to go global on your own. Working with others may be a challenge, but it can make your business model much stronger. You become a micro version of a large firm that has its own resources to wield to go global.
Work on a shoestring budget and stay out of debt – this is called bootstrapping. Guy Kawasaki (“The Art of the Start”) and Seth Godin (“The Bootstrapping Bible”) provide great insights on how to do this. Use credit facilities for strategic movements like covering expenses until a client with a big order pays.
Aim at getting clients to start business – don’t look for financial assistance to start business. Instead, focus on getting paying customers which ultimately will help prove the market potential of your business.
Flow with entrepreneurial cycles – the entrepreneurial process ebbs and flows. Learn to act proactively and with urgency, but also learn how to sit back, reflect, and be patient.
Navigating business globally is not just about knowing the context and technical aspects, but how to travel the course like ships sail the seas, which have varying conditions and weather patterns. As with sea travel, there are basic principles that help you work with the variability of going global. The aforementioned perspectives are among them.
Going Global on a Dime Steps
The GGD process is a blueprint for an approximately 18-month process, triggered by completing the aforementioned background preparation. It starts with the mindset that you are going global, but need to find the right opportunities and pathways that fit your strengths and situation. You also know that your success is tied to not only the strengths you possess, but strengths of others into which you can tap.
There are four steps you will do simultaneously and iteratively. The first is identifying opportunities. This involves scanning the environment while brainstorming business ideas with the knowledge you possess.
The second step is to gain knowledge about the business environment in which you will be working. You need to understand the markets, laws and regulations, competition, barriers, incentives, etc.
The third step is to recognize and leverage your strengths to take advantage of business opportunities. There are strengths of which we typically think, e.g., skills, knowledge, and physical assets. However, there are other assets like relationships and goodwill for which you need to account.
The fourth step is to develop the ecosystem that will support the success of the global venture from suppliers to distributors to partners to consumers. The ecosystem is not just the supply chain, or value chain. A key component of your ecosystem could be a person who is able to open doors for you to get to a key resource you need. The person isn’t in your value chain, but is key in getting a resource you need for the value chain.
The focus of this step is partnerships. Through these partnerships, you are able to add the strength of others to your cadre of strengths for a particular business venture. This is an extension of the second step in which you leverage your own strengths – you now leverage the strength of others.
After you flow with these first four steps, there will come a point at which you need to begin the funneling process, narrowing down and executing one or a few opportunities. The fifth step that begins the funneling phase is prioritizing and choosing a few suitable opportunities.
The sixth step is to develop business models and concept documents for the opportunities chosen. The business model demonstrates the viability of the venture at a strategic level. It shows what you will produce and sell, who you will sell it to, what it will take to operate, partnerships and channels you will use, the cost of operation, etc. The concept document is the written explanation of the business model in three to five pages.
The seventh step is to execute legal documentation and agreements, as well as develop an implementation plan for the first stage (which is approximately a year in length). And the eighth and final step is to implement and evaluate.
One final note about the GGD process, it looks at your going global pursuit as a project not as a formal business structure. You do not want to get into too much formality or infrastructure early on as you will need flexibility to move and configure your resources. You will be executing a proof-of-concept project, which essentially helps you refine and finalize your business model for the global opportunity while limiting risk and containing costs. By focusing on things on a smaller scale, you can work out many of the issues that are associated with running the business venture and build the relationships and partnerships you will need in the long run.
Conclusion
Your first task is to get educated about global business so you understand the dynamics at play. You can certainly pursue specific opportunities, but it is important not to neglect the basics.
Preparation and planning are critical to your success. However, you should not prepare and plan so much that you forsake implementation. I think it is better to prepare and plan a general framework upfront, then adapt your plan and prepare some more as you move along.
Keep in mind that throughout this whole process you should continually be doing research on all fronts – the country, the sector and market, business opportunities, potential partnerships. You start by casting your net wide, then narrow as you are able to see a path to take an opportunity.
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Chapter 3: Opportunities and the Business Environment
The GGD process starts with identifying opportunities. This involves scanning the environment. The best market opportunities are those that start with fulfilling a need. For example, in emerging markets basic services, e.g., housing, transport, food, water, education, and health, are inadequate for the demand.
Before discussing this step, let’s reflect on what an opportunity is. An opportunity is a possibility due to a favorable combination of circumstances. The combination of favorable circumstances includes the strengths you and your partners bring to the business venture. In fact, the strengths help create the favorable circumstances.
If we align our understanding of opportunity with the entrepreneurial perspectives shared in the previous chapter, you will find the following quotes about opportunity insightful, and perhaps a few might be entertaining:
“We are all faced with a series of great opportunities brilliantly disguised as impossible situations.” Charles Swindoll
“Luck is what happens when preparation meets opportunity.” Seneca, Ancient Roman Philosopher
“Don't wait for extraordinary opportunities. Seize common occasions and make them great. Weak men wait for opportunities; strong men make them.” Orison Swett Marden
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” Thomas Alva Edison
Some people have an
innate sense for seeing an opportunity, but most of us have to be
trained to recognize business opportunities. A simple framework for
identifying opportunities is MADE – market, assembly (or
manufacturing), distribution (or agent), and existing business.
Market refers to taking advantage of specific market, or demand-driven, opportunities. Assembly refers to producing products by either manufacturing them or assembling components into a final product. Distribution refers to becoming an agent or distributor of someone else’s products or services. And, existing business refers to leveraging the business you already have.
For market opportunities, you can use the following questions to help you identify them in a foreign market:
Is there a market gap or shortage?
Can you transfer an idea or concept from one industry to another?
Can you invent a new service or product?
Can you create value for customers from people who have under-utilized skills?
Can you take advantage of a growth trend or create your own market demand?
Are there circumstances, e.g., market switch (CD to MP3 players) that you can take advantage of?
Is there a product that has failed in a certain context, but you can make successful in your space?
Can you take advantage of fashions, fads, or growth trends?
Is there a niche market you can serve?
For assembly or manufacturing opportunities, you can use the following questions to help you identify them in a foreign market:
Is there research and development IP that you can commercialize?
Will someone allow you to manufacture and market their product abroad under license?
Can you improve an existing product or service?
Can you replace imports into the foreign market, e.g., assembling the product locally which may bring down cost of the product?
Can you recycle products and/or handle waste materials and byproducts?
Can you assemble products or combine components?
Can you add value to or substitute materials in existing products?
For distribution opportunities, you can use the following questions to help you identify them in a foreign market:
For which products or services would you be a good agent or distributor?
Would you like to serve as an intermediary – an import or export agent?
Are you able to help someone expand their market areas?
For existing business opportunities, you can ask the following questions to help you identify them in a foreign market:
What existing businesses could you buy and operate?
Can you buy a franchise or franchise your own business?
What aspects of your existing business are you not utilizing that you could activate?
What spinoffs can you develop from your current business?
What opportunities arise because of your current business?
There is another element to identifying opportunities that I need to emphasize. Look for the opportunities that are right around you, even for global opportunities. You don’t have to search far and wide often to find opportunities of which you can take advantage. For example, find local domestic manufacturers for whom you can serve as an agent to enter a foreign market or serve as an export agent.
Every opportunity has rewards and risks. You will need to determine for yourself whether the rewards outweigh the risks. Generally, the highest rewards have the highest risks. However, you can learn to mitigate risks based on how you structure your business model and operations.
A good balance to start with your first going global project is to identify a project that will give you sufficient rewards with a level of risk that you are willing to take on. It’s not always the projects that start off big that win, but those that start small and grow and evolve – a seed becoming a tree, then the tree becoming an orchard. The success of Facebook over the last five years is an example.
Looking at the Business Environment
Looking at the business environment and issues you may have to face is a major research task on your part, or on the part of someone you partner with or pay to help you. For every issue you face in a domestic market, you have the same in other markets and more. This is where SMEs and entrepreneurs can get bogged down in the technical details of going global. It is a reality you cannot get around, but doing adequate research will help you navigate this complex facet of going global.
One note, your research will only provide you general guidance. You should expect that you will need to validate information and consult with professionals for your particular situation. However, doing your own background research can help you ask more intelligent questions and leverage the money you are investing in professional services.
When you look at the business environment, you first want to consider macro variables – variables that affect a country and its market. However, you will also want to review global, regional, and local variables that may impact the environment in which you will operate. For example, if you operate in the European Union (EU) even though member nations are sovereign, certain EU laws may supersede laws in the country in which you choose to operate.
Regent University’s Center for Entrepreneurship outlines (Appendix B) several areas you want to research. These areas include general country background (e.g., geography, people, economy), structural factors (e.g., government, rule of law, fiscal policy), international trade, financial and capital markets, social and cultural factors, industry and sector development, human capital, technological innovation and research, foreign direct investment, infrastructure development, and the forecast for the country. While all of this information is not in one place, you will be surprised to find that you can get a good background profile with few monetary resources.
If you know one or a few countries that you would like to explore, you can collect an enormous amount of information from under ten sources. If you concentrate on this task for a week, you will get a better picture of the landscape quickly. These are the sources to start with as most of the information is free or costs little:
Country’s official website – This includes the major portal for the government, department of trade and industry, department of planning/economic development, and any departments focused on the sector in which you are interested.
Regional development banks – For emerging and developing regions, there are regional banks like the African Development Bank (ADB).[12] Regional banks work closely with the member countries in their regions so they are the next closest set of institutions to the countries themselves. They keep track of major projects, initiatives, and funding in the region. You can learn a lot about development and infrastructure through them.
International Monetary Fund (IMF) – The IMF is the international institution which tracks the macroeconomic situation in most countries around the world. They do economic updates on each country at least every two years.
Chambers of commerce and industry – I have already alluded to the usefulness of chambers of commerce in the country in which you are interested. At times though, you will need to do a lot of follow up by phone in order to get to the information you seek. If you visit the country, it will obviously be a lot easier to get access to the information they have available. You will also want to check if there are chambers from your country established in the country of interest, or a bi-lateral chamber, e.g., U.S.-Angola Chamber of Commerce.
Diplomatic missions[13] – Speak with both your country’s embassy in the country of interest and the country of interest’s embassy in your country, if possible. They will be able to point you to many different sources of information and people who can assist you.
Culture Grams[14] – These four-page briefs offer you high-level insight into a country’s overall culture. They are great for background information and the information is validated with natives from the country covered. If you live in the United States, you can find them at your local library and access them for free. You can also buy a culture gram for a particular country for under $5.00 online.
International trade sources – First, start with international trade resources offered by your home country. In the United States, the place to start is the U.S. Export website as mentioned before. Libraries in the United States also have access to several major trade statistics platforms. Check with the reference desk in the library. The World Trade Organization (WTO) also develops trade policy reviews[15] about every three to five years for countries around the world. A review highlights the conditions for trade in a country.
If you do not have any particular countries in which you are interested, I suggest a different path as there are just too many countries to try to look at all at once. Here are a few suggestions:
Identify countries with which your country has trade agreements and which speak your native tongue.
Identify countries that have an embassy in your country with a commercial liaison and where your country has an embassy. The countries in steps 1 and 2 should be similar.
Check out market research readily available on the list of countries you have. Even if you don’t live in the United States[16] or the United Kingdom[17], you can access the market research and doing business guides they have prepared on many countries around the world for their citizens. You just need to be aware that the content is written for their audiences, so you will need to reframe it, depending on your country of origin.
Begin to check out pathways to connect you to those markets. This is both online and offline research, but the key is to identify the people and organizations that can be leveraged to help you enter markets of interest. Your focus is looking at potential partners.
As you are doing your research, you will likely find discrete opportunities that have pathways to entering a particular market that you could use and are not tied to the process you have been following. You will need to build a background profile for the countries in which those opportunities arise if they are not already included in your research.
After you have developed background profiles, you will need to consider the practical issues of doing business or trade globally, but in your specific context. You will want to ask, “How do these things apply in my specific situation?”
I have prepared a list of questions (Appendix C) that I ponder at different times in the GGD process. You will find these and the list provided by Regent University useful in your research process, which really is a continual process throughout the life of your going global venture. They help you ask more intelligent questions of you and others, as well as help you interface with professionals you might hire to help in your research and strategy more effectively.
The one mistake I find very typical with people going global is that they do not do enough of their own upfront research to truly get a feel for the dynamics at play. So, spend some time making inquiries and doing research. You won’t get all the answers at once or in one place, but you will have better data to make informed decisions.
Conclusion
You can see that the Going Global on a Dime process is designed specifically for doing business in a foreign market. This process can be effective whether you already have an established business or your business is going to be born globally. The GGD process is designed to help you leverage not only your cash and assets but the cash and assets of other people as well.
Study up on the way that business is conducted in your country of interest and how their economy works. Spend time gathering and going over as much information about the country, its people, and their customs. This research will prove to be invaluable when you enter your foreign market.
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Chapter 4: Managing Intellectual Property
by William Northcote, Shibley Righton LLP
Whether starting a company or developing a product, anywhere in the world, you always need to make sure your ideas are well protected. All business relationships involve risk, but by taking the proper steps, you can assure yourself that if something goes awry, the law is on your side.
Intellectual property (IP) is a collection of legal rights that protect the creative work of individuals, although IP can obviously become owned by corporations. These rights recognize the intellectual efforts of creators, which gives them protection to allow them to commercialize and profit from their work for different periods of time, depending on the nature of the work.
If you invest time and money into an innovation, the first step to protecting it is to determine the ways that it can be ripped off, replicated, or stolen. It is also important to identify those people who would most likely do this, and then devise a strategy to prevent it from happening. As great as your idea may be, it is of little monetary value to you in the hands of someone else who doesn't pay royalties or other compensation.
The most important thing to do early on is to make sure your innovation is legally protected. You need to establish some form, or multiple forms, of IP protection. IP protection can include trademarks, copyrights, patents, trade secrets, and industrial designs.
Trademark
A trademark is a name, word, phrase, logo, symbol, design, image, or a combination of these elements that identifies the source or qualities of a product or service. Trademarks can be registered or unregistered, although a registered trademark offers much more protection.
If you decide to use an unregistered or common law trademark, there is no guarantee that you will be the only person who is able to use the logo and name you created. Common law dictates that the owner of an unregistered trademark is legally protected from other people using it only in the geographical areas where it is used.
If you register your trademark, you obtain a statutory monopoly for the trademark in association with the products or services listed in your registration. This ensures that nobody else in your country of registration can legally use your logo, thus protecting the brand name and reputation. Trademarks are nationally based, so if you plan to take your product, service, or company global, you must obtain trademarks for each country where you operate.
Your product or services can dictate the countries where you should file for a trademark. For example, if you’re making snow skis, you probably don’t need to worry about obtaining a trademark in Jamaica.
If finances are constrained, you should determine which countries are your most important markets or the markets in which your products or services are produced or created. You can then focus your IP strategy on those markets. For example, if you are producing a product for distribution in North America, you should seek protection in Canada, the United States, and perhaps Mexico. But if it’s being manufactured in China, you should get a trademark registration there, because in some circumstances, your manufacturer can gain trademark rights even though you’ve contracted for them to manufacture for you.
It is also very important that you use your trademark after getting it. In most countries, if you apply for and obtain a trademark and don’t actually use it within a specified period of time (this varies from country to country), you can lose your rights to the trademark. In other words, you need to use it fairly frequently in order to avoid getting expunged for what is called “non-use.”
One common trademark mistake entrepreneurs make is in working with graphic artists. For example, if you hire someone to design your logo, it is important to have them sign the IP rights over to you. You have to literally purchase the intellectual property rights in the underlying design. It is a simple, though often overlooked, procedure that can save you from potential legal hassles down the road. You can also have an upfront contractor agreement, which stipulates that any design work done for you is your intellectual property.
Copyright
Trademarks and copyrights are often confused with one another. A trademark is a word or logo that protects the goodwill in goods and services. A copyright is a statutory right that protects the expression of an idea.
While trademarks are protected on a national level, copyrights are recognized in most developed countries in the world, because of a series of international treaties. If you are a resident of a country that is part of this treaty system, then you have copyright protection in the other countries even though you take no formal steps to record it. [18]