Small business export – this article explores four important things small businesses considering foreign markets should know.
Most small businesses which in the past had depended on their domestic markets, would view exploiting foreign markets with fear.
This article discusses four things small businesses considering foreign markets should know.
The number of small businesses working across multiple countries has been growing. Many are also considering exploiting foreign markets.
By establishing transactions, partnerships, and operations in foreign countries, small businesses in Nigeria can open access to new markets and sometimes less costly sources of labour.
Gains can also be made because such moves can expose small businesses to new product and service ideas, and new technologies.
Here are four things you should know as a small business owner when considering doing business abroad:
1. SMALL BUSINESS EXPORT – KNOW THE MARKET
Small business export – four things you should know. Small businesses need to know the foreign market they are seeking to operate in.
However, many small businesses suffer because they do not have adequate information about such markets.
When considering doing business in international environments, you need to have access to clear and objective information about the unfamiliar market.
This involves carrying out market research through systematic gathering, recording and analysing of data to provide information for decision-making.
The information needed to be gathered includes the market size, the competitors and the regulations.
Small businesses need to know the global market they are seeking to operate in.
The market information you are able to gather before starting to do business in an international market is critical.
Furthermore, the information gathered is critical especially for the initial stages of your business in the foreign market.
Information is most critical and most intensively used during this phase.
Therefore, you need to gather as much information as possible because the risk is high at this stage.
Also, information is also essential to the small business owner – as a decision-maker.
In addition, information seeking helps in creating alternatives from which you would choose.
However, the need to intensively use information would decrease as your business makes progress in the foreign market.
Small businesses need rely on other kinds of knowledge such as through connections that the business establishes and the experience gathered in the course of doing business.
2. SMALL BUSINESS EXPORT – DEVELOP NETWORKS IN THE MARKET
Develop networks in the market e.g. diaspora networks.
The relationships or links you make can help your small business achieve the dream of working across multiple countries.
Research has shown that networks are influential on foreign market operations of small businesses in both manufacturing as well as service sector.
Networks in both the home country and abroad encouraged the small businesses to consider doing business abroad.
It is also important and definitely beneficial to develop links in the export country.
By developing links or relationships with people who can help your business in the country you hope to operate, can help make exporting easier for your small business.
As a business owner who interacts frequently with their international contacts, you will have your foreign market knowledge signiﬁcantly enhanced.
Such interactions would help your business develop a higher level of trust between involved individuals.
Moreover, such links would be more willing to share valuable information about the foreign market.
These relationships are also capable of providing the initial incentive to small businesses.
When well maintained, such connections can be drawn on in the development of subsequent foreign markets.
3. SMALL BUSINESS EXPORT – KNOW THE CULTURE OF THE MARKET
Know the culture of the market you are interested in doing business.
This includes knowing the values, manners, and ways of thinking of people in that market.
Understanding the culture of an international market is crucial because culture affects how businesses make use of networks in business relationships.
For example, in some places it is the culture of businesses to do business with those one knows on a personal level.
Culture also influences business practices such as venture financing, managing human resources and other management practices.
Though it may take time to create the needed relationship, small businesses need to gain this knowledge before the foreign venture begins.
The cultural knowledge acquired would then help your business know about how to deal, from a cultural perspective, with partners in the foreign market.
4. BE AWARE OF EXISTING OPPORTUNITIES AND HOW TO EXPLOIT THEM
Search for and recognize opportunities which might be useful when operating in foreign markets.
The ability to identify something new with a potential value can lead a small business to consider doing business in a foreign market.
Opportunity recognition is important for the survival and the growth of your business abroad.
Entrepreneurial knowledge refers to knowledge of the existence of opportunities and how to exploit them.
Also, opportunity recognition can be considered as a skill which becomes useful only when how to exploit that opportunity is known.
Therefore, the ability of a small business to be able to identify opportunities depend on the alertness of the decision-makers.
In addition, it depends on the access to new information that would influence the creation of new ideas.
Small business export success
Exports by small businesses tend to be successful when business owners develop the ability to recognize and exploit opportunity.
Especially, when acquired from the start of the business. That is, before international operations start.
For example, during operations in the domestic market, the business owner acquires some clues about how to recognize opportunities which might be useful when operating in foreign markets.
Even though the circumstances in the domestic market could be very different from those which prevail in the foreign market.
The ability to detect opportunities and knowing how to process information acquired before the foreign market operations start, could be very useful when you eventually start business in the foreign markets.
When a business starts to do business abroad, the acquisition of the opportunity recognition ability and how to exploit it continues.
As a small business becomes more experienced in its foreign business operations, the business owners use more intensively, their ability to detect and exploit opportunities.
The four factors described above are useful for small businesses considering international markets.
Market knowledge will help you make informed decisions for your small business.
Also, networks would help to foster trust and the willingness to share valuable foreign market information.
When you develop an understanding the cultural practices of a foreign market. You would be increasing your knowledge of the business practices abroad.
Furthermore, opportunity recognition and its exploitation are skills possessed by decision-makers.
These skills are useful for doing business both at home and abroad.
By considering these areas you can reduce the fear associated with exploiting foreign markets often experienced by small business owners.