Global markets can be critical to the local success of small businesses and technology, private sector advisors, and governments have a role to play in enabling their journeys.
Technology powers the global opportunity
Entrepreneurs are finding that their businesses can be global, even at very early stages, thanks to technology.
Kavita Shukla, founder of Maryland-based Fenugreen, which makes a spice-infused insert to keep fruits and vegetables fresh, highlights in Simple Steps for Global Success how she found a suite of tools that enabled her to run her small business efficiently and on a global basis:
“PayPal could enable us to collect foreign payments and convert currencies… Intuit QuickBooks could help us keep track of our earnings and…UPS Mail Innovations simplified the customs process…Amazon Launchpad [made] our simple idea available in 180 countries overnight.”
Technology tools are table stakes for global small business success. Businesses like Kavita’s utilize a suite of services to access customers and run their business on a global basis, from social media and advertising tools to payments, logistics and e-commerce platforms to cloud-based productivity software. When these services are unavailable to businesses or their customers, it inhibits their ability to succeed.
Overseas markets can be critical for the success of small businesses.
Foreign markets make up about 50 percent of revenue for Lansing, New York-based Advanced Design Consulting (ADC), which designs, manufactures and installs research equipment for use in labs and factories. Founder and CEO Alex Deyhim noted that, “some of our competitors closed down in the United States because they were so focused on the domestic market.” He credits international markets will helping his company survive through the U.S. economic downturn.
Small businesses that export tend to experience higher overall growth, are more likely to have added jobs in the last six months, and tend to be larger, more productive and pay higher wages compared to non-exporting small businesses.
Private sector advisors contribute to global success
Private sector advisors can also play a critical role in enabling small businesses and solopreneurs to succeed globally.
Building a team of advisors can help a small business “improve their bottom line,” says
Deborah Defer, Managing Director of Business Services and Outsourcing at BDO, a global accounting firm.
Legal and tax advisors can help small businesses understand the risk profile of the country they are entering and be more confident of success. Only 18 percent of respondents in Australia who used an accountant felt like they were struggling, versus 38 percent of those businesses who did not, according to research conducted by Galaxy Research for Intuit in 2014.
“An ounce of prevention is worth a pound of cure,” advised Daniel Glazer, of Wilson Sonsini Goodrich & Rosati. He has observed companies that “get into trouble when they take a shoot first and ask questions later approach.”
Governments can enable or inhibit small business success
Governments can also impact the ability of small businesses to take advantage of global opportunities – for better or for worse.
One way governments can help encourage global success is to establish export and investment assistance programs and advisory services to help small businesses acquire the information, confidence and best practices to go global. For example, the Australian Government maintains an online portal directing small businesses to grants, counseling and export courses offered by the Australian Institute of Export.
Partnerships with the private sector can help maximize the visibility of these programs. In the United States, the Global Innovation Forum partners with the Department of Commerce to emphasize the public and private resources available to small businesses looking overseas through the Startup Global initiative.
Another critical function of policymakers is to set the trade and regulatory frameworks that foster access to digital and physical economies around the world.
Governments should seek to foster an open, rules-based trading system that reduces friction and confusion for globally-minded small businesses, guarantee the global availability of online data flows and internet-based technologies, create simple and fair tax and regulatory structures for small businesses and consider how technology can assist compliance for global small businesses and reduce risk.
Small businesses, startups and solopreneurs have an opportunity to encourage policymakers to write legislation and regulation and negotiate new trade deals with them in mind.
This article is based on Simple Steps for Global Success: Practical advice for taking your small business, startup or solopreneur venture global, a report intended to help startups, small businesses and freelancers consider how engaging in global markets can increase their chances of building a stable, sustainable business.