By John Carroll
“Globalization is becoming a business imperative for survival and growth.”
This is a direct quote from my first book, GLOBALIZATION: America’s Leadership Challenge Ahead published in January, 2011. Back in early 2010, Paul Zane Pilsner, a noted economist, predicted that the U.S. economy would create 10 million new millionaires in the new decade. How’s everyone doing so far?
The events of the past few years, and our current national debt burden, demonstrate there is still much work ahead to improve our economy and right the ship here in America. However, I do not believe our economic challenges here at home should diminish the opportunity that globalization represents, particularly for small businesses. The global market potential is just too vast and open to new entrants seeking to expand abroad.
International trade makes up 30 percent of the U.S. economy, and U.S. exports of goods and services reached a record $2.3 trillion in 2014. Although the pace of export growth has been slowing in recent years, total exports have grown by 44 percent since 2009. What’s even more remarkable is that small businesses represent 97 percent of all U.S. exporters.
“The survivability of your business may very well hinge on your ability to adapt and make the changes necessary to effectively compete in a rapidly evolving global marketplace.”
The proliferation of the Internet and social media have made the world at lot smaller and have made ‘6 degrees of separation’ a reality. It’s much easier to conduct business on a global scale today than it was just 10-15 short years ago. Making the world smaller via our interconnected society has also enabled global competition to be much more upfront and personal, and much more pervasive.
According to research by the Organization for Economic Co-operation and Development (OECD) China, India and the rest of the developing nations will eclipse the West in a dramatic shift in economic power over the next several years. If you believe their findings, then differentiation and continued growth cannot be sustained long-term unless you constantly reevaluate, adapt and evolve your business’s footprint.
How does a local small business owner, with limited resources, commit to global expansion?
First of all, there is no such thing as a local business in today’s global economy. As I tell clients, if you have an active web site, you have already taken the initial step to globalize your business, whether you acknowledge it or not. You no longer own and operate a ‘local’ business. “You are now the CEO of a global enterprise doing business in selected markets.” You have to make this mental shift in how you view your business to get started.
Next, where and how will you invest in global expansion? If your web site is already set-up for Web or e-commerce, or can be, the expansion can be relatively painless. The benefits of Web commerce include its around-the-clock availability, the speed of access, the wide availability of goods and services for the consumer, easy accessibility, and international reach. Its perceived downsides include the limited availability of customer service, consumers not being able to see or touch a product prior to purchase, and the wait time for product shipping.
If your plans include establishing an in-country presence, then global expansion will likely be a more time-consuming and costly venture. Establishing a presence abroad requires finding the right location, hiring staff or establishing in-country partnerships, and dealing with a host of related issues including cultural and language barriers, business practices, currency exchange rates, tax code and compliance issues, etc. While having an in-country storefront may be just what is needed to fuel your global expansion, do your due-diligence upfront to avoid costly missteps.
Why global expansion? The world population hit 7.4 billion in March of this year. 95% of your potential customers live outside the U.S. borders. Do the math; this is a massive approachable market base to explore with virtually no border limitations today. Billions of “eyeballs” around the world have access to your business from your web site, social media, email lists and other sources, and vice versa.
So, why not capitalize on this openness to start a conversation with the broader global market and explore its potential for future growth?
John Carroll is a business and leadership strategist who works with business leaders to help them ‘achieve the results to move beyond their vision.’ He is a best-selling author, educator, blogger and speaker. Email John at firstname.lastname@example.org or learn more at http://www.trescoach.com/.
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