Thoughts On SMEs Looking To Grow Globally

Some businesses travel more easily than others. 

Either because they have universal appeal or because there is less heavy lifting involved in doing business overseas.

Opening a small manufacturing plant or launching a fast food chain on another continent will pose very different challenges to growing a global marketing consultancy or management training business, for example.

Doing business abroad can be relatively simple or extremely complicated. But there are a few fundamentals to consider for SMEs thinking of expanding into new markets.

👉 Don't over-commit and get your timing right

Many businesses start off serving a particular market remotely, depending on their business model, which will allow them to test the water without building local infrastructure or committing too many resources. 

At this point, there might be clear evidence of demand and further growth opportunities, but be wary of going all-in too early. Especially if that commitment takes resources and focuses away from more obvious wins in your domestic market.

👉 Understand your target market

Quite often there will be adaptations required for export markets, which can get overlooked. It's not just cultural or language differences with your product or service, and how this translates to your customers... though that's obviously important. Or even local regulatory requirements. The nature of your competition will often be very different, as well as how your business will be perceived locally against the competition. 

Ask yourself what is the experience for one of your new local customers, if they want to pick up the phone or send you a message. Are they looking for someone who is relatable and 'speaks the same language' and can that experience be delivered with existing capabilities?

👉 Mitigate risks

There are usually more variables in a foreign market. Even at a basic level, what are the implications for your business if there are currency fluctuations? Or the local laws are uncertain, or they subject to change at a moment's notice? Make sure you have identified as many scenarios as possible and mitigated the key risks.

👉 Don't be afraid to partner - but get it right!

An obvious way to mitigate some of the risks involved in entering a new market is to find a local partner, whether that's regarding distribution, sales, or more about legal and regulatory compliance. Whatever the gap they're plugging, local partners can be critical to your success.

I've seen local partners used effectively in many markets around the world. But I've also seen how frequently the 'wrong' local partner was selected, who had little in common with the values of the business and were a poor overall fit.

One particular model which can be highly effective with specific types of businesses is the franchise model - but it's incredibly easy to get wrong. The problems usually start with not being clear about the rules of engagement, signing vague contracts with the franchisees, insufficient training & support - and overall bad relationship management. Figure this out beforehand.

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