Once your business starts showing its first signs of growth, the idea of expanding further can be exciting and intimidating. The promise of progress comes with multiple risks and threats, so it is safer to enjoy stability.
However, being open to international operation and influence can widen the reach and boost the profitability of your small business. This process is called globalization. Below, we’ll discuss the main benefits it offers to businesses, as well as how you can keep pace with the globalization of your industry.
Globalization in a Nutshell
Globalization refers to the widespread distribution of goods, jobs, information, and technology across nations. Economically speaking, it pertains to opening borders and strengthening mutually beneficial partnerships between countries to establish free trade.
This paints a vision of peaceful collaboration following a stronger global economy and, some even go as far as claiming, world peace. Although globalization began to take root in the twentieth century, the twenty-first has unquestionably been its developmental era, as nations have become more interconnected than ever due to technology.
International business agreements, multilateral trade treaties, global supply chains, and eCommerce are all hallmarks of the world’s march toward globalization. We live in a world where ever-evolving technologies open up bigger markets and opportunities.
It may seem like globalization only works for huge multinational firms with substantial customer bases. Therefore, what about smaller, local-based businesses? Should you take the big leap?
Globalization’s Impact on Small Businesses
While it may be difficult to imagine a local shop taking over a worldwide market, smaller businesses can benefit from globalization, both directly and indirectly. To understand how small firms fare in the ongoing globalization process, you should study its impacts on the average business owner.
Technology has become more affordable
In practice, globalization has permitted the day-to-day operations of many small businesses. This is because the majority of the technologies you use are created in foreign countries with low-cost materials and labor, resulting in the reduction of tech prices over the previous years.
Because software, hardware, and other electronic items are so crucial to the survival of modern businesses, companies of all sizes have surely benefited from market conditions that allow them to use dependable technology at a lower cost.
Labor costs are reduced
As mentioned previously, technology has become cheaper and more readily available. This cost-effectiveness has led to the rise of remote staffing.
Depending on your sector, it is now possible to have a team of employees based in different locations across the world and keep in touch with them through video conferencing apps, project management systems, and mobile communications software. As a result, you can now outsource almost anything, including advertising, content creation, HR, accounting, and IT management. You can also get extra support for your skeleton staff, with the COVID-19 pandemic further driving the need for remote working.
Instead of spending on the hiring process and providing a full-time salary with benefits, you can coordinate with an outsourcing agency and pay them based on the number of working hours or outputs produced. You will also save on the expenses that would have gone to additional office equipment and space.
Global markets are easily accessible
The disadvantage of a more large-scale environment is that you have more competition. However, the same is true for your suppliers—you have more options for whom to buy from. Hence, you can cut down on expenditures by working with foreign suppliers who offer the same goods at lower prices.
It only gets better from here. Your target market also expands as your reach widens. You can sell internationally through eCommerce. You can distribute your products to international customers as long as they’re prepared to pay for shipping. You may even provide services to anyone through the internet, regardless of their location.
Small enterprises can compete with large corporations
One of the wonderful aspects of being a small business in a globalized world is that you can appear to be a large firm without actually being one. In terms of physical space, unassuming mom-and-pop hardware stores will find it difficult to compete with large and established stores.
Still, sharp branding, an easy-to-use website, and a diverse range of product offerings can go a long way online. Putting your business online makes it easier than ever to build your reputation.
Finding competent partners has become easier
Globalization makes the planet both smaller and larger. As a result, competing alone becomes difficult, inducing firms to acquire and merge. They recognize that they have a better chance of worldwide success by pooling resources. Small firms may do the same without surrendering autonomy by building mutually beneficial partnerships with other local and foreign businesses.
Now that you have gained an insight into the positive effects of globalization on small and medium businesses, let us now dive deeply into how you can prepare your company and staff to adapt to globalization.
Keeping up With Globalization
Prioritize your customers
Create a diverse and inclusive workforce so you can cater to a wider range of clientele. It’s helpful to have multilingual people on your team as well. Furthermore, build a learning environment that supports versatility by developing staff knowledge, skills, and capacity to better serve customers of various backgrounds.
Remember, when your customers are satisfied, they are more likely to stay loyal to your business and recommend you to others. Hence, even bigger multinational companies that offer the same services or products won’t be able to pry them away.
Embrace content marketing
Content marketing can help a small business get more exposure, which is what small businesses need to compete with industry giants. It’s vital to produce content that reflects the brand voice you’re building. It’s critical to focus on maintaining a consistent tone and degree of quality because your audience will associate your company with every piece of content you publish.
Keep in mind that content marketing can be a double-edged sword in this regard. A single instance of poorly executed content can jeopardize your entire marketing plan. It’s a good idea to focus on content creation before implementing any new marketing strategy, so you can have better preparation and execute it more seamlessly. To get started, check out this beginner’s guide to content marketing.
Keep your costs under control
Increasing your bottom line is critical to the growth of your firm. If you increase your market share while increasing your costs, you won’t have any money to invest in your firm or generate a profit.
So, while you explore opportunities to expand, pay close attention to the costs of running your business and delivering your products or services to customers. Lowering these expenses can be an efficient strategy to provide your company with the cash flow it requires while expanding and stabilizing. Here are two basic techniques to cost reduction:
Selling low-earning products or discontinuing low-performing services
Increasing inventory turnover through innovative marketing and sales strategies
Conquer a specific market
You can grow your business by focusing on a single specialization. This provides you with the chance to become a “big fish in a tiny pond.” Develop a niche so you can serve a particular set of clients. Look for a portion of the bigger market whose requirements are not being satisfied, and then focus on addressing those unmet needs on a constantly high and accessible level.
Expand your business reach
There are various ways to expand your business and introduce your products or services to a new group of customers. For example, you can open new stores, which don’t have to be brick-and-mortar.
Virtual stores, such as a website or app, can be lucrative without the costs of a physical space. An online store also allows you to introduce your goods to customers in a new market. This method can help you with increasing your market share. Aside from driving revenue, you can also strengthen your business strategy and boost long-term growth.
At this rate, globalization has become inevitable. As a business owner, you must brace yourself for the challenges and seize the opportunities the system will bring.
While you may face greater competition and encounter certain issues, the good news is that you will always have more options when it comes to employment, supply of goods, and target market. Leverage these benefits for your business so you can reap the rewards while effectively mitigating losses.