Go Global the Right Way: What to Do Before You Make the Leap

By Fergus Cleaver

It’s a big, wide world out there. Why not carve out some space for your business?

Even if you’re fortunate enough to do business in a big, prosperous country, expanding internationally is almost certain to grow your customer base—at least, if it’s done right.

And there’s the rub. Most international expansions fail because their architects drop the ball on the extensive planning, goal setting and scenario gaming necessary for any overseas gambit. If you’re not willing to put in more legwork than you ever thought possible—to cross your i’s, dot your t’s and pray that the chips all fall your way anyway—then it might be best to stick to your backyard.

For truly ambitious entrepreneurs, staying local isn’t an option. No matter what your company does or where it’s based, you need to do these things before you go global.

Make Sure You Have a Market

It’s every business owner’s nightmare: holding a sale that no one shows up for. To avoid this ignominious outcome, you need to do your homework—lots of it—ahead of time. Invest in local market research, analyze local and international competitors’ successes and failures, and speak with local business authorities who follow consumer tastes and trends. Remember: For every successful international expansion story, there’s a Target Canada debacle. Don’t be Target Canada.

Hire Local Talent

Buy local…talent. No matter how sharp your current team or how well you think you understand conditions on the ground in your target market, you can’t replicate a lifetime of insight or expertise. Before you go full-bore in a new country, make sure you have a solid team on the ground there—or, at least, an uber-competent local manager who can built that team from scratch.

Understand Local Rules and Regulations

It would be great if one set of business rules applied the world over, but that’s not always so. When you enter a new market, you need to be prepared to deal with a dizzying array of hard-to-understand regulations and customs. Some of these are “optional,” in that your business license won’t be revoked if you fail to follow them. Others, such as local tax regulations and labor laws, are not.

Raise Capital

You need to spend money to make money, and an overseas expansion isn’t your typical money-making endeavor. If you’re serious about doing things the right way, you’ll likely need to raise capital from your principals or investors before setting out. If this isn’t possible without overleveraging, hold off on expanding until your financial position is better.

There’s More?

You didn’t think this was all you had to do to launch your first international enterprise, did you?

This is just the tip of the iceberg. As noted above, it’s imperative for anyone considering an international expansion to speak with a raft of experts—peers, mentors, home country governmental authorities, trade organizations and overseas government contacts. There’s just no shortcut to international success. Doing it right means doing it the hard way. So get ready.

Bet You Didn’t Know These 5 Things About New Zealand

By Fergus Cleaver

If you have a globe handy, give it a spin. (Or just open Google Maps.) Take a gander at New Zealand, if you can find it. It’s down there, south and east of Australia, beyond the great constellation of tropical atolls and islands in the South Pacific.

Truth be told, New Zealand’s cities are among the world’s most isolated major population centers. Nevertheless, their host country holds an outsize grip on the global imagination—fueled in part by the blockbuster Lord of the Rings trilogy, much of which was filmed against an awe-inspiring Kiwi backdrop, but also by the islands’ unique, polyglot culture and friendly, laid-back lifestyle.

It’s okay to admit that you’re fascinated with New Zealand. Just don’t exaggerate how much you know about this one-of-a-kind island nation. Most non-Kiwis don’t know these five things about New Zealand, for instance. How many were on your radar?

1. Taumatawhakatangihangakoauauotamateapokaiwhenuakitanatahu

No typo here. That’s the longest place name in the English-speaking world. Of course, it’s not English—it’s Maori, New Zealand’s dominant pre-colonial language, and it roughly translates to “The summit where Tamatea, the man with the big knees, the slider, climber of mountains, the land-swallower who travelled about, played his nose flute to his loved one.”

Um, OK. Still, Taumata (as it’s mercifully known for short) is definitely worth a visit if you’re in New Zealand. It’s a prominent hill that peaks about 300 meters above sea level, near Hawkes Bay, on the southeastern corner of New Zealand’s North Island.

2. New Zealand Has No Terrestrial Snakes

Indiana Jones would love New Zealand. The island nation is home to exactly zero species of land snake. The lack of native snakes is no doubt due to New Zealand’s geographical isolation, and the lack of introduced species is probably down to the fact that snakes didn’t survive the long transoceanic journey back in the early days of colonization. New Zealand’s fragile ecosystem is beset by plenty of other invasive species, including such “mundane” creatures as common rats and possums.

3. New Zealand Has No Native Land Mammals Except Bats

Another crazy Kiwi wildlife fact: No native land mammals except flying rats!? It’s true. In prehistoric times, New Zealand was dominated by birds and reptiles, with the sole mammalian niches filled by furry, fruit- and insect-gobbling bats. The Maori, who arrived in New Zealand centuries before Europeans, introduced the first mammals, and things got really out of hand when the Brits came to town.

4. The First Bungee Jumping Company Started in New Zealand

Not surprising, given the dramatic landscape. Next time you’re dangling off a high bridge somewhere, remember what got you there—and, hopefully, what will get you out of the situation.

5. New Zealand Has More Golf Courses Per Capita Than Anywhere Else

New Zealand is often thought of as an adventure sports destination, and that’s undoubtedly true. But it’s also an unheralded golf mecca. The country has more than 400 courses—a huge number in a land with fewer than 4.5 million permanent inhabitants. The good news is that there’s less competition for tee times here.

A Non-Eye-Crossing Guide to Currency Exchange Rates

By Fergus Cleaver

Currency exchange rates are in the news a lot these days. Back in June 2016, when the United Kingdom voted to leave the European Union, the value of the British pound plunged against other world currencies, including the U.S. dollar and Japanese yen. People holding assets valued in pounds, or holding cash accounts denominated in pounds, collectively lost billions overnight.

How and why did that happen? The answer lies in the complex cause-and-effect relationships between the political, economic and even cultural forces shaping the global economy, and the subjective and objective public perceptions of the sovereign governments underwriting them.

Most people don’t know much about the ins and outs of currency exchange rates, nor do they understand how exchange rates fluctuations affect their daily lives. The good news is that a basic understanding of the relationship between global currencies, and the forces that make them tick, does not require an advanced economics degree. Here’s what you need to know—no fluff, just the facts.

Fiat vs. Gold Standard

Historically, sovereign currencies’ values were tied to the price of gold. For instance, back in the day, the value of the U.S. dollar was fixed at $35 per ounce of gold.

This arrangement suffered from systemic drawbacks. After manually adjusting the dollar-gold ratio, the U.S. government eventually abandoned the gold standard altogether. The replacement is known as fiat currency—basically, a dollar is worth whatever the government says it is.

Economic Strength and Weakness

Currency values serve as rough proxies for faith in the economic and political stability of their backers. For instance, the value of the euro declined precipitously (grew weaker) during the early 2010s, when it appeared that the European Union was in danger of collapse. The value of the U.S. dollar, whose backing government appeared more stable, rose (grew stronger) during that time.

Exchange Rate Effects

Exchange rates don’t just reflect the state of the broader economy—they can also affect it, both directly and indirectly. When a currency is stronger, its home country’s exports tend to cost more in international markets. When a currency is weaker, its home country’s exports usually cost less. Counterintuitively, then, a weak currency can actually be good for export-driven economies.

How to Calculate an Exchange Rate

Simple. Use an exchange rate calculator.

Though they rarely fluctuate wildly in one direction or another, exchange rates are quite dynamic. They’re living, breathing simulacra of the broader economy. If you’re curious about the precise value of a particular currency on any given day, use an exchange rate calculator or check popular currency pairs with a reputable financial resource, like CNBC. (Yes, CNBC is reputable, if you ignore all the breathless headlines.)

Profitable Exchange

The answer to the inevitable next question: Yes, you can make money on the currency markets. The same basic rule of trading applies to currency markets, just as it applies to equity markets: Buy low, sell high.

The foreign exchange market is often known as forex. It’s a complex and fraught landscape, one that you shouldn’t dive into without professional guidance. Suffice to say that thousands of gutsy professionals earn very good livings on the forex market. With the proper training and mindset, perhaps you can too.

Do You Have What It Takes to Do Business Globally? 10 Key Traits

If your company has a website, it’s virtually assured to reach prospective customers beyond the borders of its domicile. You don’t have to be a rocket scientist to see the potential in a cross-border business strategy.

Of course, imagining your business as a global powerhouse—or even a global dabbler—isn’t the same as actually building a global brand. Whether you’re based in a huge country with a massive domestic consumer base or a smaller state where competition is fierce, selling across international lines is no sure thing.

“Doing business internationally requires a formidable set of skills and competencies,” says Fergus Cleaver, a New Zealand-based accountant who works with closely held firms. “You don’t simply wake up one day and say, ‘I’m going to open a shop in Singapore today.’”

No matter their professional goals or the industries in which they operate, the best international businesspeople tend to have these 10 key traits. You don’t have to pass each of these tests with flying colors, but it certainly doesn’t hurt to have someone on your team who checks each box.

1. Planning Chops

Businesspeople used to doing business in a single market sometimes underestimate the complexity and multidimensional nature of international expansion. Many of the potential pitfalls can be overcome with careful planning—something that’s too often missing from international business plans.

“Talented, ambitious entrepreneurs are frequently stymied by lack of planning,” says Cleaver. “Over-preparation never hurt anyone.”

If you’re not a detail-oriented leader, surround yourself with people who are, and then task them with developing an effective plan for the next stage of your company’s journey.

2. Relationships With Local Distributors and Fixers

In some parts of the world, you can do cross-border business with the same set of distributors and local contacts. The European Union’s single market is a prime example.

In other parts of the world, each country requires an entirely new (or nearly so) set of distributors and fixers. Before you expand into a new market, identify and vet prospective partners, always with an eye to quality and cost. If possible, hire local employees with existing, potentially beneficial relationships.

3. Local Knowledge

To effectively do business in a new market, you need to understand how the local economy works. More to the point, you need to know whether there’s enough local demand for your products or services to make the expansion worthwhile. History is littered with examples of disastrous international miscalculations—Target’s failed Canadian expansion, for instance.

4. On-the-Ground Support

Local support follows from local knowledge. Assuming there’s a real market for your products in your target country, you’ll need to provide real, tangible support to your customers there. This is particularly crucial at the outset, as negative word of mouth from early adopters can completely derail whatever momentum you’ve built.

Your local support infrastructure should include in-country professionals who speak the local language and understand the local customs. If money is tight, a regional office is fine, but you need to be prepared to handle returns or conduct face-to-face meetings anywhere you do business.

5. Willingness to Think Outside the Box

This is most definitely a “soft” skill, but that doesn’t make it any less important to your international business endeavors. As you receive feedback from your first customers in each new market, you’ll likely tweak your offerings there to better reflect your audience. And that requires a willingness to think outside the box, especially if you’re not an expert on the local customs in each country. Or, if you’re more of a numbers person, it requires new hires willing to go out on a limb.

6. Language Skills

English might be the unofficial language of international business, but don’t tell your international customers. Before you expand into countries where English is not the official or de facto language, make sure you have local language expertise in-house. You don’t need a kerfuffle over a misprinted label or unintentionally rude sales staff to derail your global ambitions.

7. Legal Guidance

It turns out that sovereign countries get to make their own laws. Some countries’ laws are quite business-friendly; others are challenging, to put it mildly. It pays to know which are which, and to have on-call international attorneys—if not necessarily country-specific counsel—to advise on potentially thorny legal questions.

8. Room for Growth

Going international is exciting. It means your business is primed for growth. But in order to capitalize on your company’s potential, you need to be ready to grow. That’s not always an easy reach for small, closely held companies. If you’re serious about embracing the promise of a push into international territories, you need to design and develop a growth strategy ahead of time—and put the key prongs of that strategy, including a hiring manager or department, into place long before you market your first product overseas.

9. Cultural Sensitivity

Years ago, New York Times columnist Thomas Friedman made waves (and millions for himself) with his seminal pop-economics volume, The World Is Flat. In it, he argued that it’s easier and less culturally challenging to do business across international lines than it has ever been. In the intervening years, that has only gotten more true.

But doing business in foreign lands isn’t exactly—or even approximately—like doing business around the corner. Every country’s business culture is different. In places with unfamiliar customs, you must do your homework and be prepared to allow your local prospects to lead. The last thing you need is a deal scuttled over a miscommunication or faux pas that you didn’t even know was happening.

10. Patience—Lots of It

Patience matters too. In many countries, business moves at a relative snail’s pace. Deals aren’t inked on the first encounter—they’re allowed to blossom and develop over the course of months or even years before any ink is spilled. If you’re not used to high-touch wooing, you could be in for a surprise when you approach your first overseas prospects.

Are you planning to go global? What are you doing to increase your chances of success?