Thoughts on International Business Expansion

March 26, 2015 DVNK Consulting

International Business Expansion

Thanks to the technological advancements in the World Wide Web, we all live in an interdependent and interconnected world. Small and medium business enterprises have enormous opportunities to take their business to the next level by international business expansion and competing in international markets.

Small businesses nowadays are at a far greater advantage as the decision making process is simple and not cluttered with the long hierarchy of bureaucracy in large corporations and multimillion dollar conglomerates.

By making the right decisions and devising the right growth strategies, small business owners can raise the bar for their business and make way for its exponential growth. Here are three main reasons why you should consider expanding your business internationally.

Higher Sales Volume and Profits

International business expansion can help a business stay afloat by tapping into new markets and increasing the sales volumes. There are times when sales volumes of small businesses reach the point of saturation in the local market. In such cases, the only way to help a business stay afloat is to expand business operations to the international markets. Overseas expansion also helps small businesses achieve stability by generating more revenue than ever before.

Another reason why small business owners and new entrepreneurs should consider going global is due to the nature of the business they are dealing in. Seasonal businesses can generate revenue all year round by expanding the playing field and tapping into a larger audience internationally.

For instance, a company producing summer goods may export their goods to Australia since their summer time coincides with wintertime in the US.


Favorable Terms of Trade

Small business ventures tend to lag behind in their home country due two reasons mainly. One, stringent government policies that make gaining a profit very difficult and recession in the economy that hits small businesses very hard in terms of low sales volumes and even lower profits.

In such a situation, international business expansion is a great idea since a new country may offer better conditions for trade as compared to the home country. The reason why expansion is a more viable option is that the business will not have to face the challenges that it normally would in its home country.

For instance, a new country may provide the business with the much needed business friendly environment to help reach its full potential by offering great incentives like fewer environmental regulations and low tax rates. It is also interesting to note that labor is far cheaper in developing countries that reduce overhead costs too.

Better Exposure

Sometimes all that small business enterprises need is overseas expansion to gain recognition and pave the way for greater expansion in the future. Brand recognition on a global scale does wonders for a small business venture by increasing brand recognition. But that’s not all; a better exposure in the domestic market will also draw in more potential partners as they will view your business as a leader in that particular industry.

These are three biggest advantages of overseas expansion for small businesses. However, small business owners must understand that culture plays an important role in overseas expansion that is why it is important to do thorough research and take advice from experts in order to alter normal business processes for smoother running of the business in another country.

Read more about international business expansion and get a free consultation from DVNK Consulting.