Vancouver-based Herschel Supply Co. has become an international powerhouse in the accessory industry. In less than a decade, the family company went from selling 8,000 backpacks to selling millions of hats, wallets, backpacks and other accessories in more than 70 countries. The company, founded by two brothers, proves that with the right steps and tools, small and medium companies can find major success abroad.
In fact, 90% of small and medium Canadian businesses reported that their attempts to scale to a global level were successful, according to a 2016 survey.
But 80% of SMEs reported that they were too intimidated to expand their business to the global level, or that they didn’t feel their products and services were suited to global markets.
While exploring new markets, finding the funding to expand, and navigating international export laws can be a lot to process, companies who do business globally stand to make higher profits. With more markets available to them, companies who do business globally are also better able to weather seasonal sales dips or economic slumps.
For SMEs who are looking into or are ready to scale their businesses to the global level there is careful research and planning involved. Taking the time to conduct thorough market research, formulate a global business plan, and work out the logistics of international business can result in major financial growth and stability.
Researching your global expansion potential
Like any business decision, working toward expanding your business operation globally begins with research. You will need to consider where it makes the most sense to expand your business, and that means looking into local markets across the globe.
You’ll need to determine what your company’s competition will be in those markets, what specific challenges each market might provide, and how you might need to alter your products or business model to be successful in each potential market.
As you research the feasibility of growing your business internationally, it’s easy to become overwhelmed with the myriad of details and information you’ll need to consider. The good news is, if you see an opportunity to move forward into new global markets, there is an abundance of excellent resources available.
Drafting your global business plan
Perhaps the most important aspect of scaling your business to go global is the business plan. Drafting a business plan to outline your global growth will give you focus as you work through the actual growth process. Your international business plan should detail:
- Your goals for growth, including how many markets you’re looking to enter
- Your planned growth numbers and metrics for measuring your success
- The financing you’ll need to execute your growth strategies
- Your expected cashflow
- The business structure you will use as you expand your business to new global markets
- And the marketing plan you’ll follow and adapt as you appeal to new customer bases
Businesses that have succeeded with international growth recommend leaving room in your business plan for market research and funding that might be needed to adapt your products or services due to cultural or market differences.
Building your team’s expertise
The final step in expanding your business to global markets involves working through the logistics to carry out your international business plan. Logistics will likely involve finding suppliers or retailers for your product, creating a supply chain, securing any financing you need and undergoing any legal processes or fees that apply to your business.
At this point, many businesses who are entering the international market add a certified global business expert to their staff, either through hiring or upskilling existing employees.
Having individuals in-house with this high level of certification will ensure that you have someone on staff who has the expertise to bring all of the aforementioned elements of global business together and avoid common, costly market-entry errors. It will also demonstrate your organization’s credibility and competency to potential financiers and business partners.
While many SMEs aren’t looking to create a global phenomenon like Herschel Supply Co., there is plenty to be gained by taking your small or medium business global. Global markets can help you achieve steady growth and stabilize dips in revenue due to seasonal or economic influences. The advantages your SME can gain by scaling globally well outweigh what can seem like a daunting process, especially when you make use of the resources available to SMEs on their export journey.