For Small US Business with Dreams of Going International

Many small businesses wish to take their business to the next level and for some this means expanding their markets outside the US. When they do this is great for America and the small businesses, but only if they succeed. You see bringing the money back fixes the trade deficit and everyone wins.

Of course, there is a lot more to it than that, but on a global scale, it helps the money flow. If you have the time and desire to market your products or services overseas, then perhaps you might you might wish to read up on a few books to get a feel as to what you will be dealing with and how you might go about this. If I may, I recommend the following books, to help you get thinking of how all this works:

"International Marketing" by Philip R. Cateora - 1987.

This book will assist the businessperson in "understanding uncontrollable variables in international and domestic marketing and there is a very well summarized and brief history of international trade. A businessperson must have understanding barriers, trade relations, taxation, the IMF and how trade agreements like: GATT, NAFTA, CAFTA work, so you can watch for strategies of entry in various foreign markets. In this book there are chapters that will help you learn about:

• Licensing, Franchising, Joint Ventures, Consortiums
• Manufacturing, Outsourcing, Labor, Management Contracts
• Dynamics in culture, politics, and the risks,
• International legal issues.
• Geography barriers, transportation, energy, resources, lifestyle
• Trade zones, Unions
• Market complexities
• Developing Markets, market behavior
• Researching Global Markets
• Consumer Markets
• International Advertising and Promotions. Limitations on language, communicating your strengths,
• Managing personnel.
• Pricing for International Markets
• Logistics
• Financial requirements
• Controlling global marketing operations.

Next I recommend that you read a couple of books on specific countries and how you should do business there, as you must understand the culture and system. Let me start by recommending a book on South Korea that is quite good and then think about where you wish to do business and buy a book for each country that is written in a similar fashion:

"Korean Etiquette & Ethics in Business" by Boye De Mente - 1990.

The sub-title that goes with this book is: "A penetrating analysis of the morals and values that shape the Korean Business personality" and the author means it. One of the most interesting things about this book on Korean Business Etiquette and in the introduction is a mention of the word "Hahn" which is a psychic force to perform superhuman feats in overcoming their past terrible legacy, as you read the book or study up on the history of the Korean people you will understand more. The author states that he is not aware of another word in any language like "Hahn" and most of the culture has been influenced by Buddhism, Confucianism and Shamanism.South Korea was once a colony of Japan, before WW II, an economic wasteland.

This book helps the reader understand Korean History. The ethics in South Korea are very noticeable and they are of the highest standards, most Westerners are very impressed by this. The Korean business men dress impeccably and some suggest jokingly that all Korean males are born in three-piece suits.

In the 1400s the culture was a class system, the Great Administration Code with Yangban - Scholars; Muban - Military men; Joong-in - professionals; Sang-min - fishermen, artists, farmers who were former soldiers and it does serve as some insight to how the culture operates even today. In recent times; North Korea and South Korea were separated and we know about this from US History of the Korean War. Koreans do not like to be compared to Japanese, in fact, they may point you to the fact that many of the customs in Japan came from Korea.

Over regulation is huge in South Korea and it hurts small business. Government inspectors have even been known to check and see if the hotel employees have been trained to bow properly. The national interests take priority over the private business interests. There is incredible "red tape" one joint venture with an American pharmaceutical company required 312 documents to be filed. The Main Bureaucracies are:

1. Customs and Tariffs Bureau
2. Economic Cooperation Bureau
3. Finance Bureau
4. International Finance Bureau
5. Planning and Management Bureau
6. Securities and Insurance Bureau
7. Tax Bureau
8. Treasury Bureau

The legal foundation in South Korea is somewhat based on a German set of laws, not nearly as accommodating as that in US. Branch offices in South Korea from elsewhere must deposit operating funds into the Bank of Korea. Most all news is reported with a strict nationalistic bias.

Many business laws in South Korea mirror those from the US, such as copyright laws, trademark, employment, labeling, even types of legal company structures. No, they are not identical, but come from the same basic premises. Bigger Companies have more problems in Korea, than small ones, there are huge case studies of American Business mistakes in South Korea, including those with Chrysler Motor Company, you can learn more about how to do business from the American Chamber of Commerce - Amcham, there.

Flexible accounting practices are common with companies owned by the Government to prevent showing end of quarter losses. With Joint Ventures - primary goal of foreign partners is to make profits and in for the South Korean company it is to retain earnings in the country, thus conflicts arise, explains the author. Tariff barriers are fully in forced "against" imports and it is wise to know this upfront.