Advances in technology, communications and transport have all made international business much easier, and the scale of potential suppliers, partners and customers which has opened up as a result is vast. However, it also brings with it a raft of issues around language, trust, legal status and others which can dissuade a small business from going international as simply not being worth the effort, risk or cost.
Big business has been dealing with these problems for many years, but the solution has been to employ area specialists or pay for the services of third parties, neither of which is viable for a typical small business, and also which tend to focus on larger targets and might miss the most appropriate ones.
Imagine a simple scenario – you receive an email out of the blue from a German company that found your business online, and they want to place a large order and establish a credit line. To fulfil this you will have to find a new supplier of parts to minimise costs, so search the internet and find a French company that might fit the bill.
Straight away you have at least five fundamental problems.
How do you know the potential customer is actually a trading business entity?
How do you judge their suitability for a credit line and how can you prove this to your bank to justify the overdraft facility you will need? How do you know they are large enough to actually handle the volume they have requested? How do you ensure the French supplier is actually what you think it is, and that they have the stability and capacity to fulfil your needs? How do you justify yourself to the supplier?
Of course anybody can search for and find a company website. The problem is that a website is not a company, and there are perfectly viable companies with no website – a web presence is not proof of commercial reality, nor is the opposite true.
To address these issues, there are new online services to provide corporate information for the SME and prosumer markets. Some search across multiple country registries by name or registration number and allow users to check their trading status, type, address and other data for free.
To dig deeper, they offer the opportunity to purchase credit reports, official registry extracts, copies of filed documents etc. A good service will provide these in your language as far as possible, whatever the nationality of the company you are interested in.
So how to use these services to address the problems? First find out whether the company exists – put the name into the website and perform a search. Chances are you will get lots of results, so the site should help you to arrange and filter results – don’t forget company names are not unique across the world, and in some countries names and even registration numbers are not unique.
Once the right company is found the question now becomes how to assess their viability? Basic information such as date of incorporation will help, but some sites offer the chance to purchase much more detailed information such as the latest set of accounts through complete registry extracts to multiple credit reports. Of course this information is likely to be in the original language, so choose a service that will offer a translation service so as much of this information as possible is in a language that you and your bank manager can understand.
A historical view of the accounts and one or more credit reports will provide reassurance of the stability and financial viability of the company, and information such as the number of employees will let you know the operational scale and capacity.
Some sites will let you trace through the ownership and shareholder information of companies. For example, is it controlled by a parent company, or does the director own several other companies? This information may be available either directly or through purchased reports.
Don’t forget, your German customer and your French supplier are doing the same lookups on your company, so it is important to check your own company, and let the site operator know if there is anything you think is wrong, and use the information to prove yourself – share the link on your Facebook page or Twitter feed.
Until recently, simply getting hold of independent information of foreign companies was all but impossible. Now more and more information is becoming available and the problem has shifted to putting all this information into context, extracting the salient points and simply understanding the language.
