Going Global : Can Entering the International Marketplace be a Good Plan for SMB’s?

When I hear the term Globalization used in a business context, I usually think of large multi-national corporations outsourcing their manufacturing or customer support divisions overseas to keep their costs down. This practice is not without controversy. Detractors argue that companies who outsource are exploiting lower wage restrictions in other countries while denying American laborers jobs. However, proponents say outsourcing brings prosperity to developing nations and allows companies to grow in ways that would not otherwise be possible, thus ultimately benefitting the American workforce.

Lately, I’ve heard mentions of Globalization in a slightly different context as related to small business, specifically in the world of exports. In a USA Today article, Steve Strauss presents an amazing statistic that over 90% of the exports out of California come from small businesses. He says that much of those exports go to our largest trading partner, Mexico, whose small business sector is largely based around importing US goods. Further, he goes on to state that the Mexican small business sector generates as much as 80% of the nation’s employment.

Such numbers indicate that, for a small business, expanding one’s scope could be a lucrative endeavor. But this strategy is far from foolproof. Dagmar Recklies lists the following potential advantages and disadvantages for small businesses looking to go international in his essay “Small and Medium-Sized Enterprises and Globalization”…

Though there are potential benefits, Recklies goes on to say that businesses considering international activities need to understand that there is more involved than simply finding new customers or suppliers in other countries. For a company to succeed in expanding into international markets, they must be open to profound change, willing to take risks, and have committed leadership. There is a high learning curve and a lot of bumps along the way, but those with the right product, intelligence, flexibility and perseverance stand to reap considerable benefits.