Heather Wilkinson looks at how SMEs can succeed in overseas markets. 

SMEs typically concentrate on opertaing in their home nation, but overseas business is increasingly feasible for ambitious young companies.

Trade bodies, market researchers, the increasingly-powerful internet and overseas partners are all there to help.

The big challenge is to fully understand the commercial realities and cultural differences in each individual market before devising your strategy.

Choose the right markets

International business involves multiple considerations including local laws, customs and excise, working conditions, language and culture – all on top of the usual business challenges.

It is crucial to use local knowledge to assess each prospective market individually.

Often UK companies assume other English-speaking countries are the most sensible markets, but this can lead to a blinkered view and the USA in particular is tough to crack.

If you work with international partners language barriers and cultural differences are much easier to overcome.

Concentrate your research on identifying where your business’ unique strengths will translate into sustainable success, rather than thinking about how you personally could operate in another country.

SMEs who assume they can simply market the same product across the world in the same way rarely succeed. Instead look for markets with strong potential and innovate for them.

UK Trade & Investment can help with initial market research and other SMEs successfully trading in the area can be a good source of advice.

Become culturally astute

You will need to adapt to each new market's local characteristics, legislation, environment and cultural system.

You and your people must learn how to develop the skills, sensitivity and cultural awareness needed to establish and sustain effective business across cultural borders.

Educate yourself in local laws, customs, religion, culture and etiquette. It can also be helpful to work with an expert in cross-cultural communication who has specialist knowledge about the territory you are targeting.

Attending overseas events such as trade fairs or missions is an effective way to test markets, attract customers, appoint agents or distributors and make sales.

This can be the start of forming a global distribution network.

Find a partner

Franchising, licensing arrangements and concessions are usually the quickest way of expanding abroad.

If you find suitable partners in different territories you will spread the risk and will have access to an organisation that understands the nuances of the local marketplace.

It is often assumed that the biggest company in the field will be the best partner but smaller firms can be hungrier for joint success.

The most important element of all is simply identifying people whom you can work really well with, even when the going gets tough.

Quite often it is the case that the best relationships come out of business meetings where you follow your gut instinct and the chemistry just feels right.