Last month I discussed the opportunity of exporting your services to a foreign buyer, see Trade in Services part 1 . This month, we will discuss the practicalities of selling services overseas and understand some key considerations that you wouldn’t necessarily make when selling domestically.
Here are my top three considerations when evaluating a foreign market:
- Can you carry out certain processes to ensure that there is a quality interaction between you and your client in the foreign market? Can that same intangible be transferred and controlled to the same standards in the domestic market?
- Can you reproduce the service in the foreign market? Bearing in mind that different cultures, political and economic environments could impact the type of service you are trying to export.
- How will you ensure consistency? Will that foreign customer get the same level of service each time they use your service? Are you in it for the long run?
Looking analytically at yourself and your services will help you craft your value-add statement. Then you can answer: Why should they hire me? How am I different? Why is hiring me the best choice?
Here are some practicalities to consider:
- Evaluate the prospective foreign client and the economy of the market. What can they afford and how does the local market conduct business as compared to your domestic market? Understanding the client’s ability to pay for your services is key to your continued profitability and understanding the expectations of the foreign market will be key to your continued success.
- Evaluate and compare your beliefs and those of the country you may be doing business in. Culture is king in any market, especially in a foreign market where they may not value the role of women or maintain the same religious habits or have different beliefs based on race or ethnicity. Will your service have to be adapted to the cultural needs in the foreign market?
- Evaluate technical considerations. For many software companies the method of getting their product to the market will be through the internet. Could this affect delivery of your service or product?
- Evaluate the need for intellectual property protection. How well will the foreign market protect your IP?
- Evaluate the appeal of your service in the foreign market you are looking to sell in. Is it needed? Does it serve a purpose?
Once you have answered these questions, you may be ready to adapt to your foreign clients’ needs.
I would be remiss if I did not mention the importance of trade compliance. As a U.S.-based company you are required to ensure your business follows various export regulations. You are responsible for knowing who your customers are, where your customers are located, what they will do with your services and ultimately who will benefit from them. There have been many cases where a software engineer has developed technology that was sensitive to the national security of the U.S. and did not first obtain an export license.
Contact me if I can be of service to you! Exporting is an excellent way to create additional revenue for your business.