By Frederick Crosby
Expansion into global markets can catapult small to medium businesses (SMBs) into greater revenues, better products, and more diverse and less costly supply chains. And SMB owners are catching on. According to the Small Business Administration, since 2006, the value of small business exports has brown by 16%—a full 35% faster than large business exports.
But going global for an SMB can be daunting. Doing business in the global marketplace is more complex than just doing business at home. Without access to the big resources of big business, globalization has traditionally been out of reach for most small businesses. However, with the dramatic technological advances we’ve recently seen, you now have access the same powerful tools used by large enterprises in order to compete—and win—in the global marketplace. Whereas technology innovation previously catered only to large enterprises, today, there are countless tools available to SMBs that allow them to develop in the same ways once only available to big business. Today’s digital technology has become so inexpensive, so powerful, and so accessible, today’s SMBs can now:
- Have a web presence as sophisticated as any large enterprise.
- Engage in e-Commerce.
- Design and source products for international markets.
- Manage complex foreign taxes and regulatory compliance.
- Tap into online lending sources.
- Deliver on payment security.
…and, go global.
Now, let’s unpack the essentials for going global and take a look at some resources and new tools you can tap to help you get there.
Developing a Web Presence
You’re a small business. By definition, you are few people doing many things. Two things SMB owners consistently report they need more of are time and money. Which might account for the fact that 45% of SMBs don’t have a website—something that takes time and money to develop.
Here’s some great news: Getting your business online has recently gotten pretty darn easy. Back in the day, you’d have to hire a team of web design professionals to build a hack-proof website and develop a safe e-commerce capability. But today’s environment is full of plug-and-play turnkey solutions for web design like Wix, Web.com and Squarespace, all of which make it very easy for SMBs to get up and running online. Some, like Magento, even come with baked in e-commerce capabilities—things like shopping carts, being able to show your inventory levels online, and the ability to accept secure payments.
The bottom line is that setting up a web site and e-commerce platform has gotten way, way easier—and far less expensive. Cloud technology has brought the cost of keeping data down tremendously. It also makes it far easier to launch platforms, share and collaborate. Today’s SMBs don’t have to invest in traditional resources like web designers, IT experts, coders and servers to jump online and open their businesses to the entire world.
The truth of living in the digital world is that you simply must have a website. Your website travels to places you and your business card can’t. The first and best reason to get an online presence is that it exposes your business to people who are looking for your products that you didn’t even know were there. But going global means more than just accessing more customers. It can also mean growing your business faster by finding distributors or resell partners, and lowering your cost of goods by optimizing your supply chain.
Web Building Resources
- Wix (wix.com)—free websites, easy drag and drop, designer-made mobile optimized templates.
- Web.com (web.com)—build your own, or hire a team to help with websites, marketing and e-commerce.
- Squarespace (squarespace.com)—award-winning templates for websites, porftolios and online stores.
- Magento (magento.com)—omni-channel, multi-national e-commerce experiences.
Understanding Foreign Markets
It’s not always the case that what you design and build for U.S. customers will be received well internationally. But there are a number of things you can do to break into and remain competitive in global markets. Some are obvious and have to do with your product—like changing power sources from 110v to 220v. Some are less so, like making sure your messages are getting through. Calling a car trunk a trunk in the UK, for instance, won’t fly. It’s the boot. Some differences between U.S. and overseas markets are even more nuanced. Do your Chinese customers speak more colloquially, or do they like a more formal tone? There’s a lot to consider, but here are a number of resources you can tap for help:
Foreign Marketing Resources
Highway1 (highway1.io)—helps you adapt your products to foreign markets, source them overseas and build product roadmaps that keep you competitive internationally.
RKS (http://www.rksdesign.com)—helps position your company and products relative to new markets in ways that build your brand and help you make real connections with international customers.
Financing Going Global
Going global can be a big step and might mean you need financing. There are plenty of new loan tools out there like Credit Karma aimed at consumers, but there a few that focus on small businesses.
The Export Import Bank of the United States can help you with financing—get working capital, borrow against export-related assets, insure your exports, etc.—as well as help you develop an import-export strategy. There’s also Nav, a Credit Karma-like offering that can help you assess your credit rating but also access funds so you can pay your product brokers.
- The Export Import Bank of the United States (exim.gov)—working capital, loans, import-export strategy.
- Nav (nav.com)—helps manage your business credit profile and access financing
Navigating Trade, Customs and Compliance
Large companies have purchasing departments and plenty of people dedicated to sourcing products. They likely even have employees abroad managing their global supply chains. Without all these resources, SMBs often wind up using the same services consumers do—the US Post Office, FedEx and UPS. Which means they get the same consumer rates.
To minimize costs, get better shipping speed and greater visibility into your shipping, take a look at self-service freight forwarding portals like Flexport. There are also turnkey partners like Farrow, who can manage your international freight forwarding, compliance, customs brokering, even warehousing and logistics to make sure everything stays on schedule.
When it comes to paying foreign taxes and dealing with foreign regulations, things can get pretty complicated pretty quickly. International trade means everything from figuring out how to comply with anti-money laundering laws to keeping your supply chain free of conflict minerals—those deemed by the Secretary of State to be financing conflicts in places like the Democratic Republic of Congo.
For help navigating these tricky waters, traditional consulting groups like PwC can be out of reach for SMBs, but there are a few like Asset Compliance and Vistra who specialize in helping small to medium businesses comply with foreign regulations.
Trade, Customs and Compliance Resources
- Flexport (flexport.com)—air and ocean freight forwarder, accessible online with tracking and management capabilities.
- Farrow (farrow.com)—proactively helps with compliance to ensure expedient cross-border trade
- Assent Compliance (assentcompliance.com)—a self-service platform for managing compliance, ethical sourcing, inspections and supplier management.
- Vistra (vistra.com)—international finance, law, and accounting services to help you structure your overseas business.
Paying and getting paid in overseas markets can be cumbersome and complex and can certainly make for confusing cash flow. The process involves a number of parties, each of which have to get paid, each of which adds time to the payment process. And then there are all the fees.
There’s the cost of sending payment, the cost of receiving payment, foreign exchange fees and passing through clearing houses such as the SWIFT network—all of which mean more fingers are touching the money and there’s less of it at the end of the line. Tracking international payments has also traditionally been a sticky business because you have to go through each link in the chain to find out what’s happening, and the links don’t talk to each other.
Companies like Fundbox can tap into your bookkeeping software and help you manage cash flow by advancing payments on open invoices. And with new and innovative approaches to global payments, paying and getting paid in overseas markets has gotten much easier. Companies like Veem have developed a self-service global payments systems based on blockchain technology—which eliminates all the middlemen. Both you and your recipient or sender can log into the platform, send and receive money in local currencies, keep products and supply chains moving, and keep your business running.
- Fundbox (fundbox.com)—self-service tool for managing cash flow by advancing payments for outstanding invoices. (Fundbox is a client of SmallBizDaily)
- Veem (veem.com)—a self-service global payments platform that helps you make and track overseas payments.
Go on—go global!
Going global can help you open new markets, drive revenue and find global suppliers and talent—and the barriers to entry have come way down for small businesses. Easy to use, inexpensive self-service platforms and apps can help you solve your design, shipment, compliance and payment problems. Here’s a summary list of all the resources we’ve discussed.
- Web design – Wix, Web.com and Squarespace
- Ecommerce – Magento
- Product design and marketing – RKS, Highway 1
- Freight forwarding – Flexport, Farrow
- Compliance – Assent Compliance, Vistra, Farrow
- Import/Export Bank, Nav.com – financing
- Payments – Fundbox, Veem
Frederick Crosby has spent much of his professional career focused on solving cross-border challenges for both consumers and businesses. In the early days of PayPal, he helped the company unlock its potential as the first widely accepted global payment device for buying international items on-line. He later jumped to the eBay Marketplaces side of the business to balance global supply and demand and enabled small businesses to trade with consumers all over the world. Frederick joined Western Union Digital as Chief Revenue Officer, unlocking the remittance giant’s reach to a new age of immigrants who transfer money digitally. Currently, as CRO of Veem, Frederick has teamed with payments innovator Marwan Forzley to help bring consumer-like simplicity of payments to world of business bank wires, making it easier for small businesses to pay and receive fund from their overseas partners.