4 ways to protect your business when trading internationally

For growing companies in Indonesia, the next step for expansion often involves venturing into the international marketplace. This can help you get more customers globally and make your business known throughout the world. 

With the advent of the digital age, technology and international trade agreements, conducting business and trading internationally is easier than it used to be. However, you should be careful before taking any big steps overseas. There are many things that go into a business decision, and it's important to think about all of them before moving forward with cross-border expansion. 

Here are three global market entry strategies to prepare your organisation to succeed in international trade.

1. Carry out in-depth market research

Carrying out in-depth market research should be a crucial aspect of your business strategy. Research not just helps you figure out where to expand to but it also manages expectations about how much money you can earn. 

Relying on metrics like the PESTLE and the Total Addressable Market matrixes can show you which markets look promising and what kind of factors will affect your chances of success in that market. This information can help you make decisions about where to focus your explorations and priorities.

Companies further need to analyse and understand their target market to devise targeted and appropriate marketing strategies that are devoid of cultural assumptions. Consumer needs, preferences, and the competitiveness of the market are key factors to minimise risk and increase revenue. If you do your research, you can change your product or service to better match what the local market wants. You will also know how to better advertise and how much money to invest. 

2. Be aware of local and export regulations

Moreover, having a clear understanding of local regulations such as tariffs, subsidies, import quotas and non-tariff barriers goes a long way in ensuring you do not face customs-related difficulties. Businesses should be aware of these laws to avoid having their options limited during global trade. You’ll also need to prepare a list of export documents before shipping your goods out of Indonesia as part of the customs clearance process. To avoid potential delays due to unpaid tariffs and to forecast the costs of shipping, businesses can check if the country you are exporting to has Free Trade Agreements with your country that allows for a reduction in tariff costs.

Another important aspect of a global trade strategy is to have a clear understanding of laws in the country you wish to export to. These include what is prohibited and restricted, as well as the licences you’d need to apply for to sell certain products in the country. A business can only succeed in the international market if it knows how to navigate these domestic laws effectively. For this reason, it is a best practice for businesses to seek the services of a local legal counsel that can help them review various legal and regulatory requirements. This can help companies avoid any potential roadblocks or delays for expansion and access expert advice in any challenging situations. Although hiring the services of a reputable legal counsel may appear to be an unnecessary, additional cost, it often helps businesses avoid losses in the long run. 

3. Develop a detailed business strategy

The next step is to create a clear plan to facilitate your business’ expansion, especially if you are trading internationally. This plan should outline the different resources you will use, how your teams will communicate, and what needs to be done including localisation and operational efforts.

4. Stay up to date with the latest information from relevant trade authorities

For businesses, it can be helpful to get the latest information from global trade authorities such as the World Trade Organisation (WTO) to be prepared for the latest changes in the international trading system. It is also beneficial to be aware of the latest standards for trade security, such as the SAFE Framework of Standards by the World Customs Organisation. These are a set of guidelines to strengthen the security and facilitation of international trade.

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