The U.S. is a very big market. But any revenue growth strategy should consider international markets. Especially when the U.S. economy is contracting, as it had in 2020, looking for growth abroad is a great way to shore up income statements. But building business overseas can be daunting—business leaders often see new risks rather than opportunities. Things like getting products through customs, international commerce, and handling foreign currencies shouldn’t be viewed as real obstacles, though. There are lots of organizations, resources and services available around the country to ensure a global revenue growth strategy succeeds. It’s just a matter of finding and leveraging them. Here’s an overview of international resources available to help companies grow abroad and how to manage foreign currencies.
Take Advantage of These Business Development Resources
A variety of resources exist around the country to help businesses grow abroad.
Small Business Development Centers (SBDC) are the most comprehensive small business (meaning less than 500 employees) assistance network in the country. Centers provide confidential assistance and business advising to small companies, either at no or very low cost. They are typically hosted by leading universities, as well as state economic development agencies.
Within SBDCs, there are international trade interest sections that offer a wide range of international business development expertise: trade finance, supply chain management, marketing, market research, documentation, shipping requirements, and regulations. Other good resources in your state could be a regional or local District Export Council, the U.S. Small Business Administration (which administers SBDCs) and the Export-Import (EXIM) Bank of the United States.
With the global pandemic and its impact on the U.S. economy, there’s been a lot more interest in website globalization, global marketing and eCommerce and global social media marketing. SBDCs may have finance programs to support these activities. There’s also the State Trade Expansion Program (STEP) grant that’s managed by the SBA.
Foreign Currency Requirements and International Trade: Not as Hard as You Might Think
The financial side of exporting to foreign markets can be intimidating. If you’re thinking of invoicing your global buyers in their currency then that’s a great start. You’re already ahead of some of your major competitors who are invoicing in their own currency which can lead to missing out on a sale. The buyer, having received multiple offers, may not have access to FX risk mitigation products, and if they agree to pay using USD under 90-day terms the currency markets could move against them meaning they will pay more in their home currency. GreenShootsFX can help you achieve your desired USD margin through invoicing in the currency of your buyer and fixing the exchange rate today but for settlement at some point in the future.
The prospect of having to open overseas bank accounts, which can often be an in-person process involving lots of documentation and service fees, isn’t exactly enticing. Use multi-currency accounts and Virtual IBANs to handle various currencies all within one U.S.-based account. However, growing revenue in overseas markets doesn’t have to be hard or risky. FX risk management tools like spot transactions, forward contracts, and market orders, along with multi-currency accounts, can make doing business internationally headache-free. GreenShootsFX offers all these things.
Multi-Currency Accounts :
GreenShootsFX makes the process simple – once you become a client the opening of additional currency accounts within your digital wallet is instantaneous. Use the currency accounts to collect and during a period of weakening USD you may decide not to use a forward contract and instead, hold the currency before converting at the point the rate has peaked. If you have global vendors to pay you can also buy directly into your account to take advantage of favorable market conditions.
Spot (or even same-day) transactions allow you to quickly make international transfers without the need for an international bank account. You can purchase and send more than 130 currencies at the live exchange rate through your relationship with GreenShootsFX.
This popular hedging approach allows you to protect profits from unfavorable market moves by locking in a rate for a specific duration: 30 or 60 days, for example. GreenShootsFX offers forwards out to 12 months for more than 30 currencies, and in some cases out to 2 years.
Window Forwards allows you to fix a rate today for delivery with two dates, a ‘window’, in the future which supports the CFO if they are unsure of the exact settlement date.
This tool allows you to, in essence, pick a price today. If the market achieves a specific exchange rate at some point during the time duration you specify, then GreenShootsFX will either buy or sell the currency on your behalf, even outside of your working hours.
Don’t Do It Alone
Bottom line: Venturing overseas to grow revenue may feel overwhelming or too risky, but in reality, valuable resources and tools exist to help your global strategy succeed. The key is getting the right experts in your corner and moving forward with the right tools in your pocket. At GreenShootsFX we’ve got you covered.
If you have any questions, please feel free to reach out to us.