The U.S. is a very big market. But any revenue growth strategy should consider international markets. Especially when the U.S. economy is contracting, as it had in 2020, looking for growth abroad is a great way to shore up income statements.
But building business overseas can be daunting—business leaders often see new risks rather than opportunities. Things like getting products through customs, international commerce and handling foreign currencies shouldn’t be viewed as real obstacles, though. There are lots of organizations, resources and services available around the country to ensure a global revenue growth strategy succeeds. It’s just a matter of finding and leveraging them.
Here’s an overview of international resources available to help companies grow abroad and how to manage foreign currencies.
Take Advantage of These Business Development Resources
A variety of resources exist around the country to help businesses grow abroad.
Small Business Development Centers (SBDC) are the most comprehensive small business (meaning less than 500 employees) assistance network in the country. Centers provide confidential assistance and business advising to small companies, either at no or very low cost. They are typically hosted by leading universities, as well as state economic development agencies.
Within SBDCs, there are international trade interest sections that offer a wide range of international business development expertise: trade finance, supply chain management, marketing, market research, documentation, shipping requirements and regulations.
Other good resources in your state could be a regional or local District Export Council, the U.S. Small Business Administration (which administers SBDCs) and the Export-Import (EXIM) Bank of the United States.
With the global pandemic and its impact on the U.S. economy, there’s been a lot more interest in website globalization, global marketing and ecommerce and global social media marketing. SBDCs may have finance programs to support these activities. There’s also the State Trade Expansion Program (STEP) grant that’s managed by the SBA.
Foreign Currency Requirements and International Trade: Not as Hard as You Might Think
The financial side of exporting to foreign markets can be intimidating. The prospect of having to open overseas bank accounts, which can often be an in-person process involving lots of documentation and service fees, isn’t exactly enticing. And then there is the risk of foreign currency volatility eating into profits, making it harder to plan and reach business goals.
But in fact, growing revenue in overseas markets doesn’t have to be hard or risky. FX risk management tools like spot transactions, forward contracts and market orders, along with multi-currency accounts and Virtual IBANs (international bank account numbers), can make doing business internationally headache-free. Tempus offers all these things.
Use multi-currency accounts and Virtual IBANs to avoid having to open bank accounts overseas. Handle various currencies all within one U.S.-based account.
—multi-currency accounts: The name says it all. These accounts allow your business to receive and hold foreign funds—no need to first convert foreign funds in U.S. dollars. Hold funds as long as you want, without any maintenance fees. You can also buy directly into your account to take advantage of favorable market conditions.
—virtual IBANs: These allow you to receive foreign funds into a U.S.-based account, without necessarily converting the funds into dollars. You’re assigned an individualized, dedicated account number that is accepted in certain foreign markets—the U.K. or the Euro zone, for example. But the account number is actually linked to an account here in the U.S., making it extremely easy to receive funds into your holding account. This can help you protect profit margins by avoiding high conversion fees charged by emerchant platforms such as Amazon.
Manage FX risks with these solutions:
—spot transactions: If you’re pressed for time, spot transactions allow you to quickly make international transfers without an international bank account. You can purchase and send scores of currencies at the live exchange rate for standard two business delivery.
—forward contracts: This popular hedging approach allows you to protect profits from unfavorable market moves by locking in a rate for a specific duration: 30 or 60 days, for example.
—market orders: This tool allows you to, in essence, pick a price today. If the market achieves a specific exchange rate at some point during the time duration you specify, then Tempus will either buy or sell the currency on your behalf.
Taken together, these tools can make it less risky to start invoicing foreign buyers in their local currency. That can help your company stand out from American competitors only doing business in dollars.
Don’t Go It Alone
Bottom line: Venturing overseas to grow revenue may feel overwhelming or too risky, but in reality valuable resources and tools exist to help your global strategy succeed. The key is getting the right experts in your corner and moving forward with the right tools in your pocket.
Ready to grow your revenue globally?