How to expand your SME internationally


October 13, 2020
 

On one hand you are feeling excited about the prospect of reaching an entirely new audience with your product or service, on the other, there is fear of failure. Growing your business overseas requires an entirely different set of considerations for you as a business owner, compared to working within your domestic market. You must work with your team to plan your expansion, overcome language and cultural barriers while also meeting the differing needs in new markets. 

There is a lot to think about but with careful planning and execution, international expansion can be a game changer for SMEs:

Offering your products and services in more than one country provides a host of benefits, from decreasing your dependency on your home market to shielding your business from economic fluctuations. With the benefits comes risk. You are likely to invest a considerable amount into an international expansion so developing a detailed, written international SME expansion plan is vital. It should contain everything from detailed market research, sources of funding (don’t forget government agencies) and details on the infrastructural footprint, if any, you may need in your new location.
One area we delved into more deeply was that of your SME business value strategy. This is the ‘how’ behind your international expansion. Which of the many possible strategies would work best for your SME? This decision will depend on your product, the competition and how familiar your product is within the market you are entering. Options include adaptation, tweaking your product to suit local markets, intensity, going over and above what your competition are doing and many others. 
Do not let language barriers become a hurdle to the many advantages of expanding your business internationally. There is a lot your business can do from becoming lean to setting up a local office which will help you overcome this potential challenge.
When you are working towards increasing your market share by entering overseas markets it is critical you know what your SMEs competitive advantage is in each market to improve your chance of success. To understand your advantage your business must be crystal clear on the benefits it provides to customers, your core target market and who your competition are in that market. You then overlay this data with a competitive advantage model to work out exactly what makes your SME shine.  
If there is one thing 2020 has shown business, it is the need for robust operational risk planning. Within a matter of days millions of employees found themselves working from home because of the Covid-19 pandemic. Although you may have a management plan for your home country, moving into new markets could open your business up to some extra risk. Updating your plan with how to best manage expected risk, and cope with the unexpected, will provide your SME with the best chance of successful expansion.
Although global research on the topic of SME expats is difficult to come by, studies in expat hubs like Saudi Arabia shows 70% of employees are working for SMEs. There is a similar pattern emerging in Japan. In 2016 it was thought one third of employees in SMEs were foreign born. This is to fill skills shortages amongst an aging population. Some of the challenges your business may face when sending expats overseas include choosing the best person for the role, compensation packages and providing them with sufficient support while they are on assignment. 
If you are planning to expand your business overseas and are hoping to send employees on expat assignment, there are health and safety consequences to think about. These will depend on your industry but there are some steps you can take to keep your SME on the right side of OHS regulations.

As an SME you may have built your brand identity around your domestic market. We look in more detail at how you can change or adapt to keep the fundamentals of your brand the same while appealing to audiences with different needs overseas with practical examples of how other small and larger businesses have succeeded. 

 

This is by no means an exhaustive list when it comes to growing your business in another country but we hope it serves as an introduction to some of the elements you need to think about before making such a significant move.

If you are planning on expanding your SME and want to send expats overseas, protect their health and wellbeing with international health insurance tailored to SME needs.