Many large and small firms are turning to global outsourcing through building or acquiring foreign operations to propel their businesses. Other small firms say they are finding creative ways close to home to make up for the customers they lose to competitors with overseas operations.

Foreign options are plentiful but they are accompanied by numerous challenges, business leaders say.

"You're going to have ethical issues, environmental issues, legal issues, metric issues, cultural issues (and) language issues," said Virginia Littlejohn, chief executive of Quantum Leaps Inc. in Washington, D.C. "You really need to know you have a partner you can rely on."

Littlejohn, who is co-founder of the nonprofit organization that links female entrepreneurs with programs and stakeholders to help them advance their firms globally, was among four panelists who met in Las Vegas last week to discuss the ups and downs of global outsourcing during the Women's Business Enterprise National Council's sixth annual conference.

Business owners who have ventured into other countries say the opportunities are great but so are the initial obstacles.

Sharon Lee Avent, chief executive and president of Smead Manufacturing Co. in Minnesota, is one business owner who looked outside the U.S. to reduce labor costs and improve her business position.

Her office supply manufacturing company opened an assembly plant in Mexico about 15 years ago and today has about 600 employees there, she said.

The competition in the 1990s was international," she said. "If we wanted to play with the big players we had to become international. It is really because of the cost of labor."

She said expanding to Mexico had its share of challenges including cultural differences.

For example, the company's orders increase in November and December but Mexican workers take two weeks off at Christmas, which delayed the assembly process, she said.

Smead expanded to the Netherlands in 1998 when it acquired an office-supply manufacturing firm and that created other challenges, Avent said.

"I thought I knew the office products industry," she said, adding that she had 40 years of experience.

She said she wasn't prepared for differing shipping styles abroad. Smead typically ships pallets and cartons of office supplies, while the Netherlands company Smead acquired ships a few boxes here and there and is responsible for disposing of shipping materials, Avent said.

"It was a real learning experience to find out how they do things," she said. "You need to do your homework."

Himanshu Bhatia, chief executive of Rose International in St. Louis, also looked beyond the United States to improve her business. Her technology-support company built an office in India.

Rose International built a 30,000-square-foot building for its support operations overseas because customers requested it, she said.

The India office houses 175 people 24 hours a day and can ultimately accommodate 300 employees, she said.

One lesson she learned is that the company's vision and desired results have to be clear, Bhatia said.

"Face to face interaction every few months is important and continues the vision," she said.

The benefits obtained by moving to India include a reduction in turnaround time and an average cost savings of 75 percent on delivery of services, Bhatia said.

Other considerations suggested by various business leaders during the session include:

• Do a background check on the foreign company and make sure they are not involved with litigation before conducting business.

• Find a liaison for each country where the U.S. firm will operate, and

• Do background checks on foreign suppliers that would be involved with the operations.

Las Vegas businesses -- or other U.S. firms -- can seek business referrals from organizations in other countries, said Diane Ashley, senior vice president of supplier diversity of Citigroup Inc.

Not everyone has the wherewithal to open foreign operations but there are other ways to benefit from the global economy.

Wisconsin small-business owner Kathryn Benson said she did not have the financial and legal resources that were needed to open foreign locations so she looked for other ways to keep her packaging company afloat.

For example, Eagle Packaging Inc. repackages international products that are imported with improper packaging, she said.

Also, the company recently received a request from a company in Thailand that would like Benson's company to shrink wrap CDs after the inserts -- which are printed in the Midwest -- are placed inside the cases.

"As a small-business owner you can find creative ways to do business globally," she said.

Michelle Swafford covers health care and small business for In Business Las Vegas and its sister publication, the Las Vegas Sun. She can be reached by e-mail at swafford@lasvegassun.com or at (702) 259-2326.