When people think about small businesses, the first thing that comes to mind is the mom-and-pop store on the corner. But there’s so much more to small business than that!
Small businesses are the backbone of the economy. In the U.S., for instance, they make up 99.9% of all businesses, creating two-thirds of all new jobs and financing the improvement of local public services through taxes.
Today, as never before, a small business can expand internationally and offer its products and services to clients worldwide through the Internet. So, whether you are a startup with a few employees or a small business striving to reach new markets, we’re here to help you understand the small business ins and outs and the steps to take to expand.
What is a small business?
There’s no one-size-fits-all answer when it comes to defining a small business. It depends on the individual criteria used in making the determination.
In general, a small business is defined as a company that commonly embraces 500 employees and is independently owned and operated. But according to other definitions, a small business is one that generates less than $5 million in revenue each year.
The U.S. Small Business Administration, for instance, defines a small business according to a set of standards based on specific industries:
Defining small business is quite challenging because there are many types of small businesses. Let’s consider just some examples:
- Classic family-run businesses that have been passed down from generation to generation and typically have no more than a few employees.
- Micro businesses that are a subset of mom-and-pop shops. They are even smaller — so small that they can be run by a single person.
- Solopreneurs that are basically self-employed individuals who work independently, often from home.
Small businesses can be brick-and-mortar stores or online retailers. They can sell products or services. They can be tech startups (SaaS or PaaS, for example) or older businesses that have been around for years.
Typical benefits and challenges of small businesses
As a rule, small businesses have a lot of benefits that are not afforded to larger companies.
Normally, small businesses:
- are more nimble, with quick decision-making;
- can pivot when needed, are more adaptive in times of economic uncertainty, and are more responsive to changes in the market than their larger counterparts;
- can build stronger relationships with their customers because of the personal connection that is often established;
- tend to be more community-oriented, often sponsoring local events, hiring locally, or donating time or money to local causes.
Meanwhile, small businesses face many challenges, too, for instance:
- a lack of resources, as they often don’t have the same access to funds, customers, or talents as larger businesses;
- vulnerability to economic downturns – when there’s a recession, consumers tend to spend less, which can hurt small businesses more than it does large companies;
- competition – small businesses are destined to compete with larger companies that can offer lower prices or more convenience to customers.
Not a surprise one in five U.S. businesses fail within the first year. But despite all these challenges, small businesses are the base of the economy. They create jobs, drive innovation, and help communities thrive.
Small business strategies to grow from a local to multinational corporation
We’ve all heard the ‘garage’ stories of small businesses that grew into global conglomerates, such as Nike, Microsoft, or Facebook. If you dream of following in their footsteps, you should be prepared to reach new markets and do it bigger and better than before. So here we’ll share some basic tried and tested strategies to take your small business to the next level.
#1. Keep track of the global economy
Today, you can sell nearly everything from IT solutions, marketing content, and web design pieces to homemade jewelry to customers anywhere on the globe.
On the other hand, the competition is getting more challenging than ever, and companies have to compete on price and scale. Here are some suggestions for what you can do to adjust to global economic fluctuations:
- Research the market carefully to understand the demographics and needs of your target audience, and analyze it using modern forecasting methods.
- Build a strong team of talented employees who share your vision and are passionate about your company’s mission.
- Invest in technology (CRM, sales prospecting tools, etc.) to efficiently manage your business and attract new customers.
Crucially, be prepared to make sacrifices and take risks. It won’t be easy, but it will be worth it in the long run.
#2. Identify target markets and draft an expansion plan
Research, plan, and calculate carefully before committing resources to a new market.
You need to have a clear vision of where your business will go and put together a detailed plan for how you’ll make it happen. This includes a wide range of things, from deciding which regions you want to expand into, understanding their tax and customs systems, and complying with local regulations to figuring out the logistics of shipping/providing services and understanding language and cultural differences.
What are your potential customer profiles in each market? What are their needs and wants? What is their spending power, and what is their cultural makeup? These are the questions you should find answers to before making any further moves.
You also need to collect information on your competition in each target market to get clear answers to these questions:
- What are my competitors?
- What are their strengths and weaknesses?
- How can I differentiate myself from them?
- How should my products or services be priced and quoted to be attractive to buyers but still profitable for me?
Answering these questions will empower you to build a strong brand and develop a meaningful marketing strategy. A great idea would be to set up remote offices with local staff so your service will be available in all time zones.
#3. Seek partners
You’ll need reliable local partners who know the market particularities and can help with promotion and sales channels on land.
The first step is to establish a local network of contacts. This means tapping into your professional and personal networks to identify people who can help you connect with potential partners in your target market. The most obvious way to start is to search social media (LinkedIn is the best) by using online tools like Snov.io’s LI Prospect Finder to find businesspeople and organizations who might be interested in working with you,
The key is to cast a wide net and not be afraid to reach out to new people and organizations. Your new contacts can introduce you to people they know in the local business community and recommend service providers who can help you at your initial stage in the market.
The logical next step will be to reach out to local trade agencies and business associations, which have their finger on the pulse of the local economy and can provide valuable insight into the local market conditions. They may even connect you with reliable local partners who are well-versed in the area’s regulations, customs, and culture – all you need to expand your small business overseas.
#4. Leverage technology for building an international brand and boosting sales
Building an international brand starts with a website optimized for search engine ranking and easily translated into different languages. You’ll also need to be active on social media and use digital marketing techniques like retargeting ads and email marketing.
One of today’s most prominent consumer trends is the growing need for personalized, custom experiences. Using the right email automation and lead generation tools can give you an advantage in providing your prospective customers with what they want (an effective nurturing mechanism) and getting what you want (an increased international customer database, enhanced sales opportunities, growing revenue, and overall business success.)
As a small business owner, you have a big advantage – you can quickly adapt to changes in the market. However, business growth and expansion always presuppose a certain level of risk. Therefore, before you plunge into the global scene, take your time to do thorough research on the target markets, enlist local partners’ support, and leverage the latest tech advances to attract customers worldwide.
When it comes to the latter, today, you can gain help from dozens of all-in-one sales prospecting platforms. Some of them are specially designed to accommodate the needs of small businesses, like, for example, Snov.io. This is a best-in-class, localized in four popular languages, online platform for sales prospecting and cold outreach, which will help expand your business to the markets of your choice.