The domestic market is enormous. However, it may not be enough to sustain business growth. Going global is often the most logical step for taking business to the next level. However, mistakes made when going global can be disastrous for your business. Let’s discuss the right way to grow your business internationally.

Verify that your would-be customers exist in volume

Before you start to market and sell products in other markets, verify that customers exist there. Just because a product or service sells well in your country, doesn’t mean it will do so in others. Compare your product to what is already there to get an idea as to whether or not you could move into that space. If your product or service is novel, you might become the dominant provider—if the target market is willing to adopt it. A market segmentation analysis could help you determine if it would sell.

Don’t assume that you’ll be able to convince foreign customers to trust your brand, especially if there is already a familiar, similar product in their home country. Do a product gap analysis against local products to verify that there is actually demand not satisfied by a local provider.

Understand the Legal and Regulatory Environment

You must understand the legal environment before you enter a market. Meeting packaging standards for different countries by itself can be a challenge. Business regulations have to be met, or you could be hit with fines and fees. This is especially true when it comes to certifying products as safe in accordance to local standards. Taxes are a tangled mess in and of themselves, and you have to deal with that in every market you enter.

Financing business ventures in another country can be a problem in and of itself. Foreign banks may be reluctant to deal with U.S. businesses because of onerous American tax reporting requirements. Consider working with a service like Lending Express to raise capital for your expansion.

Consider the entire business model

Once you’ve outlined a potential business model, total up the likely cost of delivering products and support services. This is the time to verify you can still clear a profit selling products in that market at the volume you expect. Be very careful about assuming you can raise prices to cover your costs. Perform a SWOT analysis to determine if the market would buy your product at the price you’d have to charge to cover your operating costs.

Target one market at a time

Take the time to thoroughly research each market and cultivate the relationships necessary for success. Establish executives who will focus on that market and recruit local talent for everything you need to do. Start marketing and delivering the product. Make sure your local logistics and distribution network is working. Track the market’s response. If necessary, tweak the product model or translation of marketing and tech support materials. A planned, focused initiative is more likely to succeed, and because it has your attention, you can respond appropriately to issues when they arise in a timely manner.

While the domestic market is enough for many small businesses, expanding into global markets provides incredible opportunity for growth when done right. Take the time to determine the right markets to expand into and plan your endeavor to maximize your chances for success.

President Donald Trump’s protectionist trade policies were initially intended to help the United States, and there are arguments that certain industries will benefit. Yet there are some sectors that report that they’d be hurt by his protectionist policies. The truth lies somewhere down the middle according to certain analysts.

Let’s take a closer look at the issue in greater detail and see whether the US construction industry stands to benefit from the Trump administration’s protectionist strategy.

The lumber industry

President Trump applied hefty tariffs on Canadian lumber. Prices rose 25 percent year over year, and lumber now costs 60 percent more than it did two years ago. This has raised the ire of the National Association of Homebuilders among others. While the intent was to spur greater reliance on US timber, some businesses were forced to import lumber from Russia to meet price and schedule commitments.

The construction industry

The steel and aluminum tariffs are going to raise the cost of these key building materials. For example, construction accounted for more than two-fifths of US steel shipments. Those higher costs could cause construction to slow down and impact infrastructure spending. The Trade Partnership, an economic consulting group, projects that around 30,000 jobs would be lost in the construction industry as a direct result of these tariffs.

Another issue introduced by the tariffs is price volatility. You can’t be sure what you’re going to pay for materials if you use existing suppliers. A potential problem for builders would be greater control over imports. If you can’t import what you expected from an existing supplier, you’ll be forced to find a new, American supplier and pay a higher price for materials. Contractors and subcontractors have to factor prices and price risk into their bids. This could cause a spike in price bids, potentially causing firms to lose out on work or end up working for less than their material and labor costs. Over time, as an exact tariff is established and manufacturers lock in prices, the uncertainty will decrease. However, it is certain that prices for infrastructure projects like roads and bridges will end up costing more to build.

The tariffs on Canadian lumber are having a far greater impact on the broader construction industry than the steel and aluminum tariffs. NAHB head Jerry Howard said that the construction industry was still in recovery mode from the Great Recession that really only ended once Obama was out of office. However, the industry is only at 66 percent capacity, so it has a long way to go.

The potential impact on consumers

The American Institute of Architects said that anything that raises building costs adversely affects the construction industry, and they’re not alone. The National Association of Home Builders brought up concerns that the higher material costs would eventually translate into higher new building costs. This could affect housing affordability. It could also slow down the construction of new buildings due to their higher cost.

In the case of new homes, steel and aluminum are about half a percent to one percent of the final price. It is the construction of multi-story and multi-family housing where the tariff has its greatest impact. Even multi-story buildings that are mostly made from concrete need steel supports, steel rebar, and aluminum window cladding.

Consumers will be indirectly hurt by the shift to domestic suppliers on such short notice. Domestic steel production cannot meet the demand that is currently being met by foreign suppliers. Businesses will likely experience delays as they wait for domestically produced steel. That increases construction timelines for infrastructure projects like roads, bridges, and tall buildings. This will impact the construction timelines for buildings in the surrounding area.

Trump’s policy of removing burdensome regulations and thus speeding up the construction process will not entirely offset the delays introduced by shortages of critical building materials. Reducing regulatory costs will reduce construction costs long-term but not fast enough to offset higher costs for lumber and metal. You’ll likely end up paying less for roofing liability insurance but not the supporting structure for the roof itself. Ironically, his upgrades in infrastructure spending only lead to increased competition for limited American materials. Repeal of bureaucratic regulations for the banking industry may lead to more mortgage lending. That will eventually fuel more residential construction.

The lumber tariffs are creating availability issues cause delays in projects. These delays add to the cost of projects while delaying the start of new ones. If a contractor can’t finish on schedule, then everything from new roads to new apartment buildings has to wait. Conversely, the expected positive economic growth from other Trump policies is expected to somewhat contribute to a boost in non-building construction.

Conclusion

President Trump’s policies are set to have a profound effect on the American economy. But in the short-term, his tariffs are expected to affect the supply of building materials and raise material costs while the construction industry is still trying to recover. We’re paying a clear short-term cost for hoped-for long-term gains.

With a landmass that covers more than the whole of America and also a population of over a billion, it’s fair to say that China is quite a sizeable nation. By simply putting two and two together you’d assume that more people means more business opportunities, but when you consider aspects like China’s language barrier, political situation and significant internal production levels, it’s not that straight forward.

It’s almost like a vicious circle in that a business manager will know there are markets out there for them to tap into, yet with potential pitfalls in the way it does beg the question of whether or not China really is a good option for international trade.

A business can weigh these aspects as part of their decision making.

China’s Economy
China’s strong internal production and exports on paper suggest a wealthy economy, yet it is still classed by some as a developing economy, as in this article from the World Bank. As such it can indicate possible issues ahead for businesses looking to start working in, or targeting, areas outside of cities and urban developments.

However, despite this there are converse reports from this official guide for doing business in China, that the nation has been “the great economic success story of the past 30 years.” It claims how the country has gone from strength to strength and overall has seen a notable shift towards a receptive market-oriented economy.

Buying Power
This guide also goes on to explain how the markets that are available, are now the wealthiest they have ever been and that they have strong buying power. This is believed to have stemmed from a rising middle class which over this 30-year period has seen 70 percent of their population lifted out of poverty. Also, their access to technological advancements and online shopping, along with a reduction in the state control of these, has also led to greater buying power.

Again, however, one could safely assume that this is also within the more urban areas of the country.

Industries at a Glance
Another key consideration is the vast manufacturing industry China possess. Recent studies show that China is the world’s top exporter shipping an impressive $2.119 trillion worth of goods in 2016, with electrical machinery and equipment among the top products. Naturally, that’s good news for companies buying-in, but what about those who wish to export to China?

Well, the flip side to this is that there is still quite a hunger for raw materials from China to support this expanding nation. In terms of business opportunities this could be one potential trade option.

Additional Import/Export Information
Looking outside the general view of China, a business could encounter issues with more specific aspects and may want to ask questions like:

Is there a demand for the goods/services in my targeted area? As China’s attitudes and needs can vary massively around the country. As can variations on the local language.

What connections does my business intend to make with its Chinese counterparts? Their methods and approaches to doing business can be quite different to western culture, which could affect any long-term partnerships.

Is my business safe and secure to import or export any goods? There are still restrictions in place in China on certain items, but there is assistance available on correct processes and procedures, in pieces such as this shipping guide from TNT.

Is my company politically and socially aware? While the situation is much more stable now, there are still instances of unrest that could affect a business’ trading endeavours.

To answer the titular question, on the face of it, it would appear that China could indeed be a potentially lucrative option for international trade. It’s important to note though that this is once a business has thoroughly assessed the Chinese markets and made certain that they will be receptive to the trades involved.

Marcus Turner Jones graduated in economics from the University of Sheffield before working in London and Madrid. His particular area of expertise are the Latin American markets. He currently lives in Buenos Aires as a freelance writer and investor, with his dog, Luna.