Considerations before entering global markets

Strategic advice

Key resources to guide your journey

International trade offers growth opportunities that can potentially be more attractive than those of domestic markets. What if you could take advantage of those opportunities and tap into a new level of business growth?

Every country has its own unique financial regulations, business conventions, and cultural norms. Only by researching global economic opportunities and the steps you’ll need to follow to take advantage of them can you make an informed decision about how to best acclimate your business to foreign trade.

Not sure where to start? Don’t worry, there are many resources at your disposal and experienced trade partners that can help guide your company to success.

One tool business owners can use to gauge their preparation for global expansion is a PEST analysis. It examines the political, economic, social, and technological factors that could affect your business—both now and in the future. A PEST analysis is a big-picture look at how your company should proceed, given the influence of global markets.

International trade offers growth opportunities that can potentially be more attractive than those of domestic markets. What if you could take advantage of those opportunities and tap into a new level of business growth?

Here are several other tactics to keep in mind when considering a global expansion.

Tap into government resources.

Make sure your business has everything it needs to follow up on global financial prospects by taking advantage of third-party resources like the U.S. Department of Commerce and sourcing agents experienced in your industry.

  • The United States International Trade Commission (USITC) provides detailed information on trade shifts, import injury, intellectual property violations, and tariffs, including the official Harmonized Tariff Schedule (HTS).
  • The International Trade Administration (ITA) helps businesses compete abroad with online export and trade data tools, plus on-the-ground field staff expertise.
  • The U.S. Customs and Border Protection Agency (CBP) offers thorough instruction on the laws, regulations, and clearance of imported goods, including the Automated Commercial Environment (ACE) tool that determines import admissibility.
  • The United States-Mexico-Canada Agreement (USMCA) Center is a CBP digital initiative that supplies comprehensive material on the processes, rules, and certification of trade with Mexico and Canada.
  • U.S. Commercial Service is part of the U.S. Department of Commerce’s International Trade Administration. With 100 offices nationwide and more than 70 internationally, this service can help you discover your company’s international trade potential. Access their online export solutions resources for a virtual how-to guide that can help you:
    • Research foreign markets and select those that will value your product or service
    • Navigate shipping and logistics challenges
    • Find and evaluate potential business partners
    • Comply with U.S. and foreign regulations
  • Export-Import Bank of the United States (Ex-Im Bank) is an independent U.S. government agency that supplies loans, guarantees, and insurance programs to reduce commercial and political export trade risk.
  • The U.S. International Development Finance Corporation (DFC) is a federal agency that provides political risk insurance, equity investment opportunities, and direct loans for U.S. investment projects in developing nations and emerging markets.
  • The Farm Service Agency of the U.S. Department of Agriculture (USDA) helps with agriculture-based exports and provides resources like the Commodity Credit Corporation (CCC) to support farmers.

Apply practical financial tools.

Risk management tools can help improve your company’s ability to compete globally while protecting your profits and optimizing your working capital. Try incorporating the following into your expansion strategies.

Manage currency risk.

Is your company taking full advantage of opportunities to save by paying with local currency? Could a dual currency billing strategy allow your business to lock in rates at a lower cost? Will a strong or weak dollar impact your position against competitors? What about your strategic business plans? Mitigate these currency risks and others by using foreign exchange (FX) services to:

  • Reduce the risk of currency shifts for offshore revenue and profits
  • Control foreign currency conversion, even when paying in U.S. dollars
  • Gain pricing advantages

Implement secure payment solutions.

Payment risk increases with a greater volume of global transactions. Reduce your company’s risk by using secure financial tools.

Documentary collection:

  • Provides a cost-effective alternative to letters of credit that won’t tie up your company’s line of credit
  • Offers more protection than open account terms, reducing your risk exposure when compared to advanced payments
  • Assures prompt payment once a bill of exchange and shipping documents are received

Letters of credit:

  • Offers a universally accepted form of payment, reducing payment risk for importers and exporters
  • Assures importers that exporters must follow the payment terms specified in letters of credit
  • Gives exporters confidence that they’ll be paid once they complete shipping

Supply chain finance:

  • Improves cash flow by linking importers, exporters, and bankers together to finance imported goods
  • Helps ease the burden on suppliers by offering U.S. financing based on the importer’s track record
  • Includes financing options ranging from asset-based lending and factoring to inventory funding and payables discounting

Export financing programs

  • Ex-Im Bank offers financing to U.S. businesses and their customers in foreign markets.
  • Small Business Administration (SBA) helps small businesses with trade financing, working through banks like Truist. The SBA’s Export Working Capital Program provides loans that are guaranteed up to 90% and can be used for working capital, export orders, export receivables, or letters of credit.

International treasury solutions

  • International wire transfers are one of the safest and quickest ways to send money overseas. Online access allows for the execution of global financial transactions and large volumes of wire transfer requests.
  • International Automated Clearing House (ACH) is a secure and low-cost solution for sending payments internationally.
  • Multi-currency reporting services, wherein foreign currency payables and receivables are combined into a single overseas account, provide streamlined international transaction monitoring capabilities. Multi-bank reporting services can combine balance and transaction information for accounts held at various financial institutions around the world.

Export insurance

  • Export credit insurance protects the exporter against the risk of nonpayment, allowing the transaction to work under competitive open account terms. The Ex-Im Bank and private sector insurers offer export credit insurance. Insuring the accounts receivable provides collateral for export financing.

Expertise matters.

The success of your global trading business depends on your ability to establish meaningful relationships with experienced partners who can help simplify the complexities of the international market.

Global expansion can affect every level of your staff, so before expansion begins, be sure to internally prepare everyone, not just your leadership team, for the challenges that lie ahead. Be transparent about the advantages of this global expansion and what your goals are for the organization. Preparation and communication are critical to ensuring the health of the expansion.

Once it’s time to go global, consider establishing a group of trusted members of your organization who can be the first team on the ground. This means also ensuring that your C-suite is prepared for the expansion and the many challenges they will face, and that they feel confident leading their respective teams in global expansion.

Finally, remain aware of and flexible with cultural differences. When bringing together local talent and your team in the United States, there will, inevitably, be miscommunications and different styles of doing business. These differences can include compensation, perks, employment laws, or just a style of working. Remember to remain open-minded and accepting of these cultural differences.

Is your company primed to take advantage of global opportunities?

Talk to your Truist relationship manager or global trade specialist about expanding your business into foreign markets.