When most people think of global businesses, they usually think of products sold to international markets. But product-based businesses aren't the only companies that can be successful in a global marketplace. Service-based companies are increasingly becoming more popular internationally.
In May of 2017, the Bureau of Economic Analysis released a report on international goods and services. The report indicated that the export of services increased $0.6 billion in May, which is 200 percent greater than the increase in the export of goods. Some services perform well globally by nature of their business. For example, travel and financial services increased $0.3 billion and $0.2 billion, respectively, in May, according to the U.S. Department of Commerce.
Global expansion isn't without its challenges, though. Ed Marsh, exporting advisor for American Express, noted that successful international service businesses must be able to transcend cultural differences.
"Designing airports and convention centers, for instance, are services that have common primary considerations in terms of function and regulation everywhere in the world," Marsh added. "Yet, the specifics of the design will vary depending on a market's culture."
There's also differing social customs to consider when doing business overseas. Julia Wong, CEO of international interior design and consultation company Julia Wong Designs, was approached by international businesses due to the relationships she's had with other clients.
"The social aspect of doing business plays an important role when working with international customers," Wong said. "It's important to understand that different cultures have different business styles – for example, a lot of business in Asia is done over dinner."
Wong told Business News Daily that the biggest obstacles she has to overcome to successfully market her service internationally is understanding and bridging cultural and lifestyle differences. Marsh had similar advice.
"When entering new markets, businesses should consider adjusting their marketing, business models, designs, etc., to best fit the culture of a particular market," Marsh said. "The key to exporting services is understanding where there is a problem or need in certain markets and knowing how to solve it."
Marsh noted that selling services and products internationally both require businesses to ask the same type of marketing questions: What problem do people want solved, and what experience or benefit do they want?
So how do you reach your potential international customers? As with any market, Marsh noted that having an online presence is key. Marketing teams need to produce the right information online to reach the desired target audience, he said. Similarly, Wong noted that it's imperative to offer a website that's available in multiple languages.
Though marketing products and services internationally are the same, the logistics of working overseas can be more difficult for services. Marsh warned that companies should be aware if they're creating a local business nexus, which would require tax and permit payments, registration filings and employment considerations.
Depending on the scale of the service, businesses might also need to hire and manage an overseas workforce and comply with regulatory requirements, Marsh said, though services that can be offered remotely are less likely to have these issues.
Need more advice for going global? Check out this Business News Daily guide.