When Tony Ellison launched an outpost of Shoplet, an online office-supply store in the U.K., he got a crash course in international business.
Although the British customers Shoplet began serving in June speak the same language, "it's still a vastly different culture," said Ellison, the founder of the New York City–based company. Even the names for common products and services are often a little different in the U.K. Free shipping isn't available like it is in the U.S. At least, not if you sell it as "free shipping." In the U.K. it's known as "free delivery," where it's just as big a selling point as it is in the U.S., but the words make a big difference.
Building a cross-cultural business offers a big opportunity for entrepreneurial firms like Ellison's 75-employee firm. It's become a little easier, too, in the mobile phone era, enabling companies to find new customers all over the world. The International Trade Administration at the U.S. Department of Commerce estimates that more than 70 percent of global purchasing power is outside the U.S., and exports now account for 13.8 percent of the country's GDP.
Many entrepreneurial companies are seizing the opportunity. A 2013 survey by JPMorgan Chase found that 61 percent of middle-market firms say they are actively doing business in international markets this year, up from 58 percent in 2012 and 43 percent in 2011.
Still, it's easy to make mistakes that can quickly unravel your international expansion efforts.
(Read more: Arab Spring 2.0: The rise of women entrepreneurs)
"When I look at privately held companies, when they're expanding overseas, many tend to underestimate the amount of capital required," said Morgan McGrath, head of international banking for JPMorgan Chase's commercial bank. They may also be unaware of the time senior managers in the U.S. need to invest in tasks, such as meeting government officials and customers abroad. "They want to deal with the top person in the company," he said. Some firms may also be unprepared for the rigors of recruiting talent, which can be time consuming, especially for a privately held company that is not well known overseas.
The challenges highlighted by JPMorgan Chase are most likely to apply to corporations of some size. However, for any business owner, large or small, there are some critical mistakes to avoid—mistakes often made by entrepreneurs when chasing the international consumer. Here are three: