There is lots of talk these days about how the world is getting smaller. We talk about how tools like that all important cloud make it possible for us to do business with anyone from anywhere. We talk about how the independent economies of the world are slowly but surely merging to form one singular global economy. It makes sense, then, that you would want to expand your business beyond the borders of Great Britain…or even the UK.
In some respects, doing business internationally—especially if you are an independent entrepreneur selling virtual goods—is relatively easy. You simply put the word out about your product and work with a payment processor that has a built in currency converter. Viola! Done! Internet Marketers have been enjoying this freedom since PayPal was invented.
If you have a more “standard” business model, though, there are some things that you are going to have to keep in mind.
Currency Is Not Universal
As a UK business, it’s natural that you would want to base your products’ prices on GBP and what makes sense, cost-wise, here at home. As we’ve pointed out, however, when selling to an international market, you need to think about how the GBP stacks up against the currency of your export market. For example, at the time of this writing, the exchange rate between GBP and USD is 1:1.70. This means that something you price at 25GBP will cost 42.50USD. Is your product worth that much over there? Remember: the cost of living is different!
High Risk Industries
While your business might be well established here at home, in some countries, the type of business you run might be considered “High Risk.” For example, in the US, companies that deal in “adult” products and services, ecommerce, gambling or even sometimes average startups—simply because they lack a stable history of profit—are considered high risk. The High Risk Pay Blog post “Do You Qualify as a High Risk Merchant?” offers a list of criteria that you can use to determine if your company fits this definition.
If your company is considered high risk, you might have a hard time setting up payment processing with a standard merchant processor in the company to which you wish to export your product. You’ll likely need to work with a processor that specializes in processing payments for high risk merchant accounts. Luckily, many of these companies partner internationally so costs to you should be minimal.
Consider Cultural Translations
There are all sorts of things that simply “don’t translate.” For example, in the United States “Khakis” is a type of trouser! Make sure, then, says Inc.com, that before you take your domestic branding for granted that it will translate to the market in which you want to sell. You might have to do some re-branding for your new market to get people excited about your products or services (or even to be able to advertise them—the US has very provincial ideas about what you should be able to say and show on television).
Do not ever assume that you can simply start selling stuff in another country. For one thing, tariff laws are very real and you will have to pay them on your company’s profits and products. For another, not every country awards business licenses the same way. There is a lot of red tape that you will have to sort through before your company can be up and running in another country. Some companies choose to set themselves up virtually, with domestic addresses, phone numbers, etc. to cut down on this. Before you do that, consult an attorney. You don’t want to find yourself on the wrong side of a law you didn’t know existed!
In spite of the complications of international expansion, it is still definitely worth exploring. Just make sure to see to all the details before you make that first sale. Then you can sit back and watch the profits roll in!