It's Global Entrepreneurship Week!
To mark this special week, we’ve put together a list of 10 points that you’ll need to think about if you’re planning to buy or sell goods or services from outside the UK:
Will you take payment from your customers in their currency, such as dollars or Euros?
Make sure that you’ve agreed up front, in writing, with your customer, which currency they’re going to pay you in. It’s not unknown for businesses to charge their customers £100 and receive only €100!
Consider setting up a PayPal account if you don’t already have one, to help you handle receipts and make payments in foreign currencies - but beware of their commission charges.
Remember also that you may be affected by fluctuations in exchange rates. Check out sites like xe.com and oanda.com for exchange rates.
Allow extra time for money to come from abroad and make sure you’ve budgeted for the time lag.
You may want to impose tighter payment terms than for UK customers, to allow for this, but make sure you’ve agreed payment terms with your customers overseas before you carry out any work or ship any goods.
Your customers will like being able to pay you in their own currency, but remember that your bank may charge to receive payments in a foreign currency, or may even not accept them.
If you’re paying suppliers overseas, your bank may also charge to make these payments and you may have to make special arrangements such as phoning the bank to make the payment, instead of using online banking.
If you’re shipping goods or posting them overseas, remember to check local requirements for packaging and labelling. Use a reputable courier such as FedEx to make sure, as far as possible, your goods reach your supplier in the best condition, and use a track n trace service so that you can keep an eye on where your goods are. It’s also worth paying extra for guaranteed delivery.
5. Translation and local variations of language
Your overseas customers and suppliers may not speak English, or may have their own spellings and terminology. As an example, in a brochure for the US, spell “color” without the u!
Think also about translating your manuals and training instructions.
Remember that languages have different regional variations, for example different expressions and idioms are used in Northern Germany, Southern Germany and Switzerland. Where are your target customers?
6. Local conventions
Again think about what you’re selling and to whom. For example, the US uses a different system of clothes sizing to the UK. Size 12 in the US means size 14/16 in the UK. If you’re using the same website to sell to worldwide customers, think about putting a conversion table on your site to help them.
You may be on a different time zone from your customers (see below). Does the time and distance mean you’re less able to answer queries from customers? Are your customers happy to accept support by email if they’re on a different time zone? Consider a service such as Skype to avoid international phone call costs, and remember you can’t readily visit your customers to deliver training if they’re a long way away.
8. Time zones
Companies often host webinars to train new users. What if that new piece of CRM software you’re buying is from a US company? What time will their webinar be? The US alone has 4 different time zones. Do they put their clocks forward and back in spring and autumn as we do? Make sure you know what time 10am PST means in the UK!
Google Calendar offers a conversion facility, alternatively put “time zones” into Google to find a site which can help with this. There are lots of different sites so it’d help find one that works for you.
9. National holidays
Remember that different countries have different holidays to the UK, both national and religious holidays.
For example, many French businesses close for the whole month of August, while the United States has a national holiday for Independence Day on 4th July. So don’t try and launch a new venture selling to France on 30th July - and don’t be cross if an American supplier doesn’t return your email on 4th July!
Google Calendar has a very useful feature that lets you subscribe to a calendar with the national holidays of lots of different countries. Open your calendar, select Add on the left-hand side and choose to Browse Interesting Calendars, then find the calendar for the country you’re trading with.
10. Local business etiquette
You may never meet your overseas customers or suppliers, particularly if you’re selling or buying via the Internet. But if you’re going to do a large deal, you may well travel to meet them in their own country.
Do your research before you go and make sure you know the local business etiquette. Should you shake hands on greeting? If you’re a man, is it considered polite or insulting to open the door for a female business contact? Local customs vary!
Don’t be shy about trading overseas, the world is getting smaller all the time with Internet communications. But do your research first!
STOP PRESS! To celebrate Global Entrepreneurship Week we’re also offering an extra month’s FREE use of FreeAgent to anyone who signs up to the software this week - yes, that’s 2 months free instead of 1! But hurry, this offer ends Sunday 21st November!
To claim your extra free month, simply sign up and use the referral code: GEW2010
Disclaimer: The content included in this blog post is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this blog post. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.