Entrepreneurship CHAPTER 4 SECTION 2

 When you travel abroad for business, you should study the customs of the country you are visiting.  Tips for showing respect: 1.Dress conservatively 2.Do not correct the other person’s English 3.Be prepared to remove your shoes 4.Respect different tastes of food 5.Do your homework 6.Build a relationship 7.Bring an interpreter if needed

 Many sources can help you locate the best market for your product or service.  SITC (standard industrial trade classification codes) – inform you of what kinds of products are traded in specific countries  For a country to be considered a good export candidate, about 5% of its total imports should be American goods

 Trade missions – let small business owners meet and talk with foreign agents, distributors, or potential business partners  Best prospect list – this means it is a product that other countries are looking to purchase  The best products for exporting are paper, electronics, chemicals, apparel, computers, industrial, and agricultural products

 Disposable income – money left after taxes  Discretionary income – money left after all necessities have been taken care of  The US imports a lot of goods from other countries for two reasons: 1.Low labor costs 2.Some products are found only in other countries

 To find opportunities in importing, attend trade shows, read trade publications and catalogs.  Exporting is a way to expand your business to a new market.  It takes longer to make a profit exporting because of the time necessary to build relationships.

 Ways to enter the global exporting market: 1.Establish e-commerce website 2.Trade intermediary – agency that serves as a distributor in a foreign country 3.Foreign joint venture – alliance between an American small business and a company in another nation 4.License agreement 5.Export management company – business that handles all tasks related to exporting 6.Freight forwarder – business that oversees shipments

 Over 100 federal agencies are involved in the import and export process.  Anyone can supply a product or service. Can you solve a problem that people in another country are facing.  To determine if there is a market for your product or service, conduct market research