Don’t Jump In Overseas Markets Without a Net
In his recent best-seller The World Is Flat, Thomas Friedman dissects how the lowering of trade and political barriers and the technical advances of the digital revolution have expanded business borders like never before. At Clayton & McKervey, we have seen a dramatic increase in our practice of clients conducting business globally.
Great Benefits, Great Risks
One result is that more small and mid-sized companies are venturing into the waters of international business. Global trade offers a number of potential benefits, including new markets, increased business exposure and prestige, higher sales and profits, and the leveling of seasonal fluctuations in the sales cycle. What’s more, overseas demand for products made in the United States is stronger than ever.
But succeeding in global markets requires a major commitment of time, energy and resources on the part of business owners and decision-makers. Having access to the right business advisors, here and abroad, can ease the way considerably.
Recognizing the increasing need for global client support, Clayton & McKervey is very active member of PKF North American Network and PKF International. Through these associations, we have ties to accountants and business advisors at more than 430 firms in 119 countries. That means wherever you and your company go, our expertise and experience go with you.
We see it as our responsibility to help our clients meet the challenges of the globalization. For more information on international tax services, please contact Kevin McKervey at 248.208.8860.
Look Before You Leap
Remember a few key considerations before deciding whether or not to take the plunge into international waters:
- Consider subcontracting
Sometimes, companies feel pressured to go global whether they’re ready to make the commitment or not. If your goal is simply to increase sales, consider subcontracting with another company already established in a foreign country
- Don’t ignore potential financing and pricing challenges
U.S. banks generally cannot finance assets and collateral that are located overseas, so you will likely need significant liquid assets of your own to support international expansion. And consider carefully how you will price your products and services overseas given foreign taxes, regulations, currency exchange rates and other factors that may distinguish overseas sales from domestic sales
- Plan your budget carefully
Plan a rough budget of anticipated expenses, even if this is only a starting point, and determine how you will fund the effort