Global Business Perspectives

You CANNOT ignore globalization if you want to keep your market share and keep pace with your competitors.

Globalization is real, new technologies, advanced communications and improved delivery options are making the world smaller every day.  We now have access to information and markets around the world with just the press of a few key strokes on your computer.  Know that foreign companies are competing here domestically - which makes you a global competitor right in your own back yard.

Why limit your company’s sales to local or national markets?  There are 6 billion people outside of the U.S.

Globalization is not the enemy.  Increased exports for local businesses means more profits, more profits means more growth domestically which intern means more jobs locally.  Often times globalization is made out to be the bad guy when we lose jobs here in the U.S. - when really advancing technology causes about 70% of job loss.

Within 10 years the Institute of the future predicts that 1/2 of all U.S. small businesses will be global by 2018

The global business train is leaving the station - are you going to be on it or left behind holding your hat and saying I wish I had gone on that ride?

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Exporting outside of the U.S. offers many opportunities to grow your business.  However, the idea of getting paid is essential to making all the fuss worthwhile. 

First, be sure to have a strong business plan and check out what kind of financing options the SBA offers.  Government financing options are offered by the U.S. Small Business Administration (SBA 7Am Export-Express Loans, Export Working Capital Programs and International Trade Loan Programs) and the Export-Import Bank of U.S. and some state governments have their own financing programs.

There are many private sources like commercial banks, private export finance companies, export management companies, export training companies, and factoring (houses or factors). 

International payments - can be used as a marketing tool and can give you an edge against a competitor. 

Based on how trust worthy you perceive your buyer to be the following financing options are available.

1.  Cash in advance - ideal and the least amount of risk, but obviously your client has to trust you too.

• Wire transfer is best and is almost immediate
• Credit Card transactions can be done through your bank or services like paypal

2.  Letters of credit - most common and safest payment method

• Provided by a bank for a fee
• Terms and agreements are included in the documents supporting the letter of credit
• Payment is made after all required documents verified and terms are satisfied

3.  Draft or Bill of Exchange - Foreign check

• Draft is used when an exporter desires to retain title of a shipment of products until the payment is made. 
• Takes time to clear the bank (up to six weeks) - may be a fee involved

4.  Open Account - Often used once you have established trust with the client who consistently pays.

• Typically well established customer and has excellent credit
• Be careful - Lack of documents and banking channels may make it difficult to pursue and enforce legal claims

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