The opportunity for an entrepreneur to setup a business or for small, medium enterprises (SMEs) to rapidly expand has never been greater. The barriers to building a global business are crumbling as costs lower and possibilities increase. This is due to digital technologies providing a global platform to reach consumers, enterprise class technology being available to rent and the increasing sophistication of the global supply chain.
A large proportion of SMEs in the Asia Pacific (APAC) region are already generating international revenue as 88 percent earn money outside their home countries—and this is expected to rise to 96 percent in three years’ time (Oxford Economics, 2013). This is mainly due to business being done in neighboring countries. There are even more opportunities for SMEs when doing business in markets outside of Asia. SMEs account for around 90 percent of all businesses and employ as much as 60 percent of the work force in APAC, but at present they only generate around 30 percent of exports (Asia Pacific Economic Cooperation, 2013).
And while internationalizing has never been more achievable for SMEs, the same opportunities are of course being utilized by other businesses to enter new markets. In fact around one-third of SMEs in APAC cite increasing global competition as a top trend affecting their business (Oxford Economics, 2013). Going global outside of APAC is now a necessity for entrepreneurs and SMEs to thrive and survive.
It’s a classic dilemma for SMEs: when should they set-up and grow internationally? Expanding around the region, however, is a different story to expanding into countries further afield and on other continents. Often, SMEs find the complex customs regulations and formalities daunting to navigate, and this can become an impediment to new market growth. As one of the world’s largest transport and logistics companies, FedEx is committed to assisting businesses to maximize opportunities in international trade.
So here are some essential tips to help SMEs smoothly navigate customs around the world for global expansion:
Do your research
Before offering your products to overseas customers, be clear about the details and differences in customs between countries as they may vary widely. For example, customs in emerging markets tend to require more official documentation, and expect to do some paperwork as not all countries have moved to fully automated processes.
Use the right language when filling in paperwork
The commercial invoice is probably the most important piece of paper for international shipping, so use the right terminology. Here are some examples:
- “Air Waybill” is a contract between the shipper and the airlines that states the terms and conditions of transportation
- “Customhouse Broker” is an individual or firm licensed to enter and clear goods through customs
- “Harmonized System Code” (HS Code) is a universally accepted classification system for trade goods, used to classify products and their corresponding staff
- “Value” is the price paid/ payable for the goods by the buyer to the seller
Think like a local
Get to know the local environment well and ensure you meet the requisite local standards. Use information provided by companies like FedEx who have a wealth of information available online about customs in different countries. Have an inquisitive mind and consider attending any country-specific events, or joining a local SME organization to obtain market specific advice.