Written by Ray Ziganto, Founder and CEO of Linara International
You don’t need any more statistics to convince you that your total available market is bigger than what you currently serve. In fact, even in a “flat” market, you can always take share, right?
Hell, that’s why you went into business in the first place!
Why does going “global” or “international” have such a “pucker-factor” associated with it?
Let’s go through the “AGPCL” (anti-global-pucker-checklist):
Customers: Before you get started fantasizing about new customers, have you really taken a look at the customers you already have? According to Small Business Trends, 58% of small businesses in the US already have international customers. Even more small businesses likely support OEM customers that have international operations. Your first step in evaluating your options for international expansion starts with customers your probably already have.
But it doesn’t end there. Whether you have international customers or not, you still need to include some objective 3rd party market research to build a foundation for your expansion strategy. There are two numbers that manufacturers historically measure incorrectly: factory utilization and market penetration. I guarantee every manufacturer reading this has more of each available than they think (and that’s a good thing!).
Supply chain: Maybe you already have a solid growth plan that is exceeding your expectations on a regular basis. Congratulations! But if 2020 has taught us anything, it’s that we need to build resilience into our supply chains…the places we buy the inputs for our manufacturing operations. Think of it as an insurance policy that helps to support unexpected volume spikes, reduce the likelihood of critical shortages, and a source for market intelligence. Your international vendors are a great source for information on local and regional market conditions. Leveraging international supply chain resources is an excellent way to de-risk your business, and ultimately be a more reliable vendor to your end customer. Sounds like a competitive advantage, doesn’t it?
SMBs vs large enterprises: Given the advances in trade and technology over the last 10 years, the barriers to entering the global marketplace have dropped to the floor. Ecommerce platforms, 3PL services, mobile, virtual showrooms, and video conferencing have made it possible for the solopreneur to run an online marketplace that supports customers around the world just as effectively as a large enterprise organization. What this SMB has going for it is size, or absence of action-slowing size. Small companies have an inherent agility that big companies lack. Small firms can make decisions quickly, experiment more often, pivot and iterate as needed — all at a cost that’s measured in hundreds or thousands of dollars, not millions of dollars. Think of this: 96% of the world’s consumers live outside the US. For less than you spend on your cable bill, you can go get your share.
But I can’t afford a Big 8 firm to tell me what to do: Don’t worry, the path forward is already well marked, paved, lighted…and in some cases, partially subsidized! Whether you need help formulating an international expansion plan, identifying supply chain or distribution partners, or setting up an ecommerce platform, there are an abundance of resources ready to help. You’re just few clicks away from getting help from Federal, State, and Local industry trade groups and country-specific economic development offices. These groups have deep knowledge and experience working with companies just like yours.
It’s a big step! Yes, it is. And it’s a big commitment. But if you have a plan and you’ve done your homework, international expansion can become not only a new revenue stream for your company; it can become a true competitive advantage as well.
This week's #B2BTuesday Tip:
Don't rely on just one market. This can make you vulnerable to economic downturns, seasonal demand, and competitive pressure. Expand to new markets and diversify your risk.