How Smaller Businesses Can Expand Internationally

Discover how expanding internationally enables small and medium sized businesses to make cost savings, access top talent, and build strategic partnerships

How Smaller Businesses Can Expand Internationally
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As a small business owner or start-up founder, how are you supposed to know when the time is right to expand internationally? The answer might be clearer than you think. Expanding internationally offers access to new customer bases, diverse revenue streams, and lower operating costs, along with increased brand awareness and a competitive edge.

From accessing new customer bases and diversifying revenue streams to benefiting from lower costs and increasing brand awareness, there are myriad compelling reasons for smaller firms to go international.

For example, according to research from PwC in 2017, the top 15 fastest growing large economies over the next 27 years are all developing and emerging market

economies, with 9 being from South and Southeast Asia. Despite some negative economic headwinds, there are still good reasons for businesses to invest in emerging markets as part of an international expansion strategy.

In this blog post, we’ll explain how small businesses can expand internationally, and look at strategies for success.

Tap into new customer bases

One of the primary drivers behind international expansion is the ability to sell to an exponentially larger customer base worldwide. Even if you've saturated the market in your home country, there are billions of potential customers around the globe. Establishing a presence in new markets allows you to introduce your product or service to a fresh audience, reinvigorating sales and growth.

Let’s look at the UK as an example. According to the global bank HSBC, of the UK businesses already trading internationally, 87% intend to expand further over the next year and 33% are looking to grow significantly – up by 2% from last year.

Diversify your revenue streams

Relying too heavily on a single geographic market is an inherent business risk. Economic downturns, regulatory changes, supply chain disruptions, or other localised issues can severely impact your bottom line if you're overly concentrated in one area. International expansion helps mitigate this risk by giving you diversified revenue streams across multiple countries and economies.

If sales decline in one market due to temporary factors, you can rely more heavily on stable or growing demand from other regions. This protects your business from excessive volatility and overreliance on circumstances in any single locale. Geographic diversification can provide stability and open new runways for growth.

Benefit from cost advantages

Savvy small and medium-sized businesses (SMBs) can exploit significant cost differences between countries to gain a competitive edge.

This concept, known as cost arbitrage, allows companies to reduce operational expenses by strategically allocating tasks and resources to regions with lower costs.

Let’s look at a few examples:

Talent acquisition

According to Indeed, the average software developer salary in the US is $108,000 annually, while in India, it's just $40,000. By tapping into talent pools in Eastern Europe, Latin America, or Southeast Asia, SMBs can achieve substantial savings on software development costs.

Real estate cost savings

Savvy small and medium-sized businesses (SMBs) can exploit significant cost differences between countries to gain a competitive edge. This concept, known as cost arbitrage, allows companies to reduce operational expenses by strategically allocating tasks and resources to regions with lower costs.

Access new talent pools

In an increasingly knowledge-based global economy, human capital is often the scarcest and most precious resource for any business.

Skilled employees, engineers, developers, and experts are the backbone of successful companies—yet top talent is frequently clustered in geographic hotspots that may not align with your HQ location.

By expanding into new countries and markets, you instantly open yourself up to entirely new talent pools of potential employees, contractors, partners, and vendors.

You're no longer constrained by the limited labour market in your home country or region. Instead, you can start tapping into high-skilled talent in other countries and markets.

Increase brand awareness

In our hyper-connected era, companies with an international footprint often benefit from enhanced brand recognition and perceived marketplace credibility.

If your SMB operates across the globe, it lends a sense of importance, resources, and prominence—even if you're still relatively small. To consumers, there's an implicit branding halo around firms that have expanded abroad and market their products/services to the world.

Additionally, having an established in-country presence can be valuable for marketing. You can adjust your messaging and approach to cater to the cultural norms and buyer expectations in each new locale. This localised brand-building allows you to steadily raise your company's profile by connecting to customers on a market-by-market basis worldwide.

How small businesses can successfully expand internationally  

Do your research

Different countries and regions have divergent languages, cultures, laws, regulations, and business norms you need to thoroughly understand before entering their markets. Invest in comprehensive due diligence and market research to avoid missteps. Identify the best geographic opportunities based on your product/service fit, consumer demand, competition, and potential costs.

Scale your business into key pilot markets

Rather than trying to boil the ocean, start by carefully selecting just a few target markets to initially focus your international expansion efforts. Look for regions that offer relatively easy entry in terms of regulations, infrastructure, customer acquisition, and cultural/linguistic alignment. Build experience, learn key lessons, then scale out from these starting footholds.

Invest in local talent and partners

Hire in-region employees, contractors, agencies, and advisors who deeply understand the language, cultural nuances, and compliance obligations of each new locale. Don't try to run international operations from your home base with people lacking on-the-ground expertise. Cultivate local talent and partners as your engines for success abroad.

Example: consider working with an Employer of Record (EOR)

Establishing a fully-owned international entity with employees, offices, and legal/tax liabilities is a major investment better suited for large enterprises. Many SMBs find more value in leveraging an Employer of Record service that allows you to quickly and compliantly hire international workers without setting up your own subsidiary. An EOR handles all HR, payroll, benefits, and compliance so you can focus on running your business.

Make use of modern remote work models as you expand internationally

While you'll need some amount of local presence, also capitalise on remote work opportunities to access worldwide talent without full-scale office buildouts. SMBs are well-positioned to pioneer remote international hiring given their nimbleness and lack of ingrained in-office culture. Use the best mix of local and remote resources for maximum geographic coverage and cost efficiency.

Make the most of new technologies

From app-based communications and translation tools to ecommerce enablement, data management, and automation—lean into the latest digital technologies to cost-effectively maximise your global presence without the full overhead. Cloud infrastructure, online selling, global payment processing, and distributed teams allow SMBs to orchestrate complex worldwide operations very efficiently.

While international expansion was once the territory of only elite multinational corporations, small businesses and start-ups today have an unprecedented ability to access worldwide customers, talent, and resources to propel their growth. By thinking globally from an early stage, ambitious small and mid-sized companies can overcome domestic constraints and unleash an entirely new phase of innovation and success.

According to Gartner research, while 70% of tech CEOs have some experience with international market expansion, many of their management teams do not. To ensure you're making the right decision when expanding your business globally, it's critical to have a tactical expansion strategy that you can adjust as needed.

Continuous monitoring and adaptation of your strategy based on evolving market conditions, regulatory changes, and local consumer behaviour will be key to sustaining success.

Accelerate your global expansion with Omnipresent

If you’re looking to expand your business into new markets, Omnipresent is here to help you  compliantly hire, onboard, pay & manage employees and contractors worldwide.

  • Our intuitive platform, employment solutions
and expert support ensures a superior employee experience, enabling you to find, manage and retain the top talent your business needs to thrive.
  • Our team
of experts is here to help you manage the intricacies of employing teams anywhere and everywhere.
  • Omnipresent is built with a compliance-first mindset, so you don’t have to choose between growing your global teams and maintaining regulatory alignment.

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James Mallett

Want to onboard an international employee today? Get started.

Omnipresent makes it easy to hire, pay, and support your international team with our top-notch services including our trusted global employer of record services. Book a call with us to start building your global team today.

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