Small Businesses Can Learn From Going Abroad
Lessons learned from exporting goods and services abroad can also help companies improve their domestic business
Ed Marsh, Exporting Advisor to American Express, says, “While business growth is desirable, it isn’t always the primary concern for a company. Small business owners are pulled in many directions by the demands of running their business and might not be able to prioritize expanding into international markets.”
Businesses that consider exporting their goods and services internationally typically are looking for opportunities to scale their company to new markets and create new revenues. According to the Department of Commerce, 95% of the world’s buyers and 70% of the world’s income lie outside the United States. But it’s not as well known that.
In addition to creating a new international revenue base, Marsh noted that exporting can also help with some common challenges small and mid-sized businesses face domestically, including:
- Hiring and retention
- Differentiating their products and services
- Diversification
Hiring and retention: Great employees are at the core of a successful company, but many industries face fierce competition for hiring and retaining top talent. According to the American Express Grow Global Insight Guide: Myths and Opportunities for Middle Market Exporters, companies that are active globally are often appealing to employees because they:
- Provide global opportunities for workers
- Are typically more financially resilient
- Pay higher wages in many cases
Being global can help a company stand out when marketing to prospective employees and can provide an edge in the battle for talent.
Differentiation: Markets are so competitive today that most small businesses crave an edge or niche to help them stand out. Exporting can deliver that in a couple ways.
First, selling in international markets can act as a global laboratory. It’s common for a new culture or environment to adapt or influence new uses for products and services. An example of this would be if a manufacturer of cleaning products learned a European distributor was selling the same product for a slightly different purpose than in the U.S. This observation could inspire the company to market their product for additional uses in both global and domestic markets.
Second, companies that export develop a deeper understanding of other cultures and markets. These insights can be used to increase the effectiveness of marketing and sales strategies and reach new segments in the U.S. market. For example, insights gained through experience in Brazil can position a company for success with the very large Brazilian expat community in the Boston area.
While selling in a foreign country exposes a product to new cultures and customers, these tips can also be repurposed for domestic expansion in addition to global growth.
Diversification: Concentration risk -- a concept that says a company faces a greater risk when it focuses its sales heavily in one group or area – is common for many small and mid-sized businesses as they often sell in a couple regional markets or have a few key customers. Exporting creates market diversification, which can help offset currency fluctuations. In other words, even when some regions are on an economic downswing, there are still considerable opportunities for a company that is diversified across countries where their goods or services are sold.
Take your business global: Exporting can help a business grow its sales, but it can do much, much more in the long run. For more tips, the Grow Global website has resources for businesses at all levels of their exporting journey.
