Smaller firms often feel that, given their more-limited staff, resources and budgets, certain opportunities are outside their grasp.
However, in many cases, with the proper attitude, knowledge and tools, there’s no ceiling on what can be accomplished, and few areas better illustrate this than international business services.
With just a little know-how and some direction on where to look, any firm can get in on the global marketplace and the plethora of business it offers.
I THINK I CAN
Many firms may find it tough to get past the consideration phase when thinking of international opportunities. It’s plausible to think that they’re not in the right position — be it firm size, geography or lack of knowledge concerning the area — to take a step onto the international stage. Not only is this notion false, but it’s detrimental to their business and its future.
Alan Deichler, president of international accounting assocaition CPAmerica International, says that a firm’s opportunities are usually right under its nose.
“The No. 1 enemy of developing an international practice, and the biggest misconception I see, is believing [that] international business is U.S.-bound referrals coming to a U.S. firm, and that if enough of these referrals happen to arrive, the U.S. firm will invest in an international presence,” he said. “Of course, successful international practices are developed in firms’ hometowns with their own clients and prospects looking to become global companies.”
Perry Barnett, partner of business services at Gainesville, Ga.-based firm Rushton & Co., is living proof of this notion. With a staff of fewer than 50 professionals, Rushton has come to represent 41 international companies across 16 foreign countries, dealing in manufacturing, service and sales companies including those with foreign direct investment in the U.S. and outbound investment. The firm is also affiliated with the CPAmerica International and Crowe Horwath International associations.
Barnett agrees that international opportunities already exist right here at home. “Many firms may not know where to find the [international] training and referral sources,” he said. “International business does not have to start with working and traveling overseas. It can be as simple as looking at other companies that are in the firm’s current service niche that may have a small percentage of their business that is international.”
Gale Crosley, a well-known growth consultant and president of advisory firm Crosley+
Co., believes that the only thing stopping firms from international opportunities is themselves.
“They think that since they don’t have any clients with international operations, or current international accounting needs, that this market opportunity doesn’t apply to them,” she said. “They are basing their conclusion on what they happen to see or not see with their own client base.”
“They often think they are too small,” she continued. “Their perception is that international is only for large firms [and] they don’t realize that two-thirds of all small businesses will have some international operations within the next few years, and these are their current and potential clients!”
GETTING YOUR PASSPORT
Once you and your firm are ready to take on international prospects, first steps can be easier than one thinks. By tapping into the full reach of your clients, your firm is in a great position to start making connections right from the start.
“Speak to economic development personnel and join an association related to a country of interest to learn more about international trade,” said Barnett. “What we’ve found is that many countries share the same types of issues that clients have to address. It is just that from country to country the issues may be at higher or lower levels (i.e., value-added tax, accounting standards, tariffs, social issues, culture, employee issues, etc.). So by starting with a country of interest first, learning international business can be fun.”
“Chances are pretty good that your best business clients are already involved with international products or services,” said Deichler. “This usually equates to distribution issues, payroll questions and all sorts of international tax requirements. It might be as simple as asking your clients about their international intentions. While you pursue local prospects, you might include discussions about their international requirements. This might be a great entry point to prospect opportunities once you gain the global awareness, including vocabulary and access to expertise.”
Deichler also brought up the notion of accounting associations and their international divisions, which can be vital to firms considering a move to international business. “If you are not in an association and want to grow internationally, it is pretty much a requirement that you pick one and join,” he added. “It is also very important that you get to know the international firms in your association prior to sending your best clients’ business requirements to these firms. Of course, if you are in a network that reviews and ensures standards are being met in your international segment, you have an advantage and degree of confidence in these international firms. However, even within these network firms, it is always better to know the people in the international firms you are referring your best clients to, and the network/association meetings are great places to meet and build relationships.”
Crosley reminded firms not to be deterred, even if they believe that they have no internationally connected clients, as more resources exist to help them find some.
“Don’t be concerned that you don’t have international clients,” she said. “There are companies all around you with international operations and needs; you just haven’t looked for them yet.”
Crosley suggested visiting a site such as uniworldonline.com to find out which companies have subsidiaries around the world. From there, interested firms can narrow down prospects to a small list of countries and industries with market concentrations in their area.
Crosley added that simple Internet research can provide “a map of where to focus, who to interview, how to find early adopter clients, and where to find buyers in great quantities.”
Crosley cited examples such as a client researching Uganda and finding the Ugandan Consulate located nearby, or another client discovering medical device manufacturers in Israel to supplement their health care institutions in Minnesota.
Of course, all this work and research will pay dividends for one’s firm in the end, adding new depth and opportunities that didn’t exist before. Barnett claimed that adding international service helps “expand and deepen a CPA firm’s current niches, as well as open new service areas. International clients are loyal and can balance down times in other service areas of the firm.”
Barnett suggested that international newcomers start with a small business, such as a one-person U.S. sales office, which “allows a firm to understand international issues with a smaller tax and financial impact. With regard to business development, CPAs can begin by educating their current referral sources that they are entering the international business arena. No one will know unless we tell them, then word of mouth will travel.”
IT’S A SMALL (AND LARGE) WORLD
At the end of the day, firms on the fence owe it to themselves to get more involved with international business. There’s simply too much upside to write off the opportunity as too difficult or not a good fit for the firm, and firms already have a great deal of resources at their disposal to get started.
“An important consideration is if your clients are contemplating going global — do they even consider you as an option to help them?” asked Deichler. “If they don’t, are they considering another firm and are they open to multiple accounting firms or does that mean your current U.S.-based services might be in jeopardy?”
“Second, most midsized accounting firms would like to remain independent,” Deichler added. “Remaining independent requires growth to fuel succession plans — hiring, developing and electing new partners. Most organic growth in the profession today is pretty low, maybe 1 to 3 percent net, at best. A successful international practice would provide a significant opportunity to grow your current clients to the size that may support your plans to remain independent.”
“The No. 1 consideration in a growth strategy is good market conditions,” added Crosley. “Market conditions in international aren’t good; they’re excellent. The markets are large and aren’t yet cluttered with competition. So, go for it!”
