Startups know the challenges associated with relying on equity and word-of-mouth to jump over the line and become a mid-market firm. It’s not easy, but more companies are successfully clearing the hurdles to reach sustainable growth. Once a business reaches the mid-market level, there are new challenges to battle including international expansion.
According to a 2015 Q4 report from the National Center of the Middle Market, 47% of mid-market firms are confident about their performance in the global economy moving into the current fiscal year. In this volatile business environment, companies need to establish a flexible strategy that prepares them for growth in changing markets. One critical aspect of many mid-market firms’ plans is a structured international strategy.
International Expansion has High ROI Potential for Mid-Market Firms
According to a report from Mazars, out of 150 executives of mid-market firms, 45% of these companies make more than half of their revenue in international economies.
Operating in a global market instantly opens the door to new consumers along with access to developing trends. The new market is also an opportunity to refresh a stale product by offering it up to the fresh faces.
Prepare a Solid International Strategy Before Diving into a New Market
Establishing a game plan prepares you for all the hurdles that come with global expansion. Growing internationally is part of 56% of mid-market firms’ strategies, so it’s something that you should begin thinking about now if you haven’t already.
Increase Competitive Advantage through International Expansion
Nearly half of the executives from the Mazers report state that they operate in more than 10 international markets. In order to keep up with competitors, mid-market firms need to emerge into global markets with a strong international strategy. This growth is quickly turning into a must-have, versus a nice-to-have.
Explore Financing Options for Mid-Market Firms
Once you reach mid-market status, it’s easier to obtain debt to finance your growth initiatives. This is a welcomed option compared to your startup days when you had to rely heavily on expensive equity. Review your cash flows and join the 58% other mid-market firms who took on the appropriate amount of debt to finance international expansion. If you’re working with ample free cash flows, consider internal profits to finance your endeavors.
If private equity is still the best option to fund your expansion, go for it. More than 31% of mid-market firms use this as a top funding source because in many ways, international growth is like an internal startup.
If your firm needs assistance with international expansion, we do offer consulting services to start you on the right track. Contact us today to discuss your plans!