Global Business No Longer Just for Big Companies
International sales are no longer exclusive to major corporations, according to a study released this week by Portfolio.com, which reported an increasing number of American small and mid-sized businesses [SMB] are using technology to cost-effectively fuel sales in global markets.
Nearly 25% of American SMB owners surveyed said some part of their business came from overseas, with an additional 6% reporting they plan to join the ranks in the near future – resulting in a combined total of nearly one million SMB owners engaged in business abroad.
Portfolio.com estimates SMB international sales will jump from $1.7 trillion to $2 trillion.
“With the power of Internet sales engines and the reach of mobile devices, smaller businesses and entrepreneurs in the United States are able to extend their reach beyond our borders," said J. Jennings Moss, Portfolio.com's editor. "These business people, and they're a growing number, see tremendous opportunities for sales growth overseas, and advances in technology have given them a cost effective and efficient channel to drive their international expansion strategies."
According to the study, 41% of total SMB owners use services over the Internet to sell products, compared to 62% of all SMB owners.
"The Internet has had an enormous impact on how SMB owners are doing businesses internationally, with 79% relying on the Internet as one of their most valuable business tools," said Godfrey Phillips, vice president for research at The Business Journals, which conducted the study.
SMB owners with an international strategy reported average sales of $13.2 million and 32% sales growth, compared with $7.7 million and 20% for all SMB owners.
Despite the successes, SMB internationals do face major cultural challenges, like language barriers and varied regulations, when expanding abroad.
“The learning curve for any SMB person who wants to operate in another land is steep,” said Moss, who suggested resources such as the federal government’s Small Business Organization, and the International Trade Organization, which offer tools for operating businesses in other countries.
Social media is another valuable resource that SBM owners are using to bridge the cultural gap in international transactions. The study found that 58% of international small businesses use social networks in their business plans, compared with 49% of total SMB owners.
According to Phillips, social media is an especially valuable resource for SMB internationals because it can add trust to their company brand. SMBs have often distinguished themselves from multinational corporations for their more personable touch, and social media offers SMB internationals the chance to cost-effectively reach a loyal customer base abroad.