It is more important now than ever for small and medium-sized businesses (SMBs) to consider international expansion. We live in a highly competitive world where global expansion and global sales have become vital for a SMBs growth strategy.
An article published by Small Business Trends states that SMB owners who are engaged internationally run businesses that, as a whole, do better than their counterparts that operate only in the United States. Companies with an international strategy report average sales of $12 million and 32 percent sales growth, compared to $7.7 million in average sales and 20 percent sales growth for all SMB owners.
With that being said, international growth can help startups soar by gaining access to a unique talent pool, acquiring new customers, improve market perception, finance growth, and most importantly, increases competitive edge. Based on our experience and research we have compiled a list of SMB international growth tips for success.
1) Adopt a clear product strategy
- Develop a cutting-edge product that allows you to expand into new countries and regions.
- Do not assume if your product is doing well domestically, that it will do even better overseas. Test your product and strategy in your target country to guarantee success and determine if changes are needed.
- Utilize associates in your target country to identify opportunities, monitor new developments, and maintain contacts with key decision makers.
2) Keep a light footprint
Maintaining a light and agile footprint is extremely important for SMBs when expanding internationally. To justify expenses and assure long-term ROI, many companies are holding off on infrastructure investments or hard costs until their operations have matured.
On the other hand, don’t be too distant. There is nothing more valuable than having a physical in-country presence. Human capital is priceless and can be a company’s best asset when breaking into a new market. The key to a successful in-country presence for SMBs is doing so with a light and agile footprint- keeping flexibility and costs down while gaining the true benefits of market entry.
3) Partner up
To successfully operate in a foreign country, you must understand the in’s and out’s of that country’s laws and regulations. Protect yourself by partnering up with best-in-class companies whose primary focus is to understand potential risks and recognize warning signs. Whether you decide to engage with a local attorney to protect, consultant to advice, or team up with a company like Velocity Global to manage your entire hiring process, you will avoid serious pain point in the future.
For more detail on picking the right global expansion partner, view this post.
4) Revenue gain, reinvest, repeat
Choose an international market to introduce your product/ service where market competition is low. This will help free up extra revenue to reinvest in product domestically and continue to gain market share. Utilizing the lean approach could help you keep outside capital sources at bay and increase equity. This is a great strategy for when funding and lending are scarce.
5) Be proactive, not reactive
International growth is a long-term and big step for any business plan. It’s not always as smooth sailing as you’d originally hope for it to be, therefore, it is important to take a proactive approach when entering a new market. Having a clear strategy to penetrate multiple markets at once and getting the internal buy-in from your entire team leads to much higher success rates.
Many of our SMB clients are using either International PEO or FSaaS as a foundation for their international growth strategy. We help these smaller companies increase flexibility, mitigate risk, and speed their time to market by 97%. Call us if you have any questions regarding international expansion, we’re happy to help.