A full 60% of SMEs are open to the idea expanding their business overseas, according to a survey conducted by Newable(Jan 2020).
Almost a third of these SMEs (27%) selected the US as their preferred destination. Perhaps this is to be expected now that there is so much uncertainty about the terms of access to the EU market, which accounted for about 50% of the UK’s total trade in 2019. What is surprising however, is how the world’s growth markets were so low down the list of preferred destinations. The markets of Asia and the Middle East for example provide great opportunities for the ambitious and well prepared.
The survey also found that SMEs were concerned about their lack of in-house capabilities to make international expansion a reality. 70% cited regulatory risks associated with overseas expansion as their major concern. This as a valid concern, however, help to understand regulatory requirements is readily available in our experience of working alongside Governments’ International Trade organisations and SMEs undertaking international expansion.
The key differentiators for those SMEs that made a success of moving into a new market were a thorough understanding of the new market. How do your products and services benchmark against the competition and how do the needs and behaviours of customers in the new market differ from the home market?
Accurately planning for the costs involved with new market entry, by fully understanding changes to the business model and supply chain, ensures that there are no nasty surprises and SMEs do not overreach themselves. Securing effective financing options can also make or break a new market entry foray.
The development of a successful market entry strategy has many components. Seeking external advice, from both governmental and corporate advisors, to bridge knowledge and experience gaps, is key to ensuring success.
