Producing nearly half of the private nonfarm GDP, small businesses (SMBs) are a huge part of the U.S. economy, serving as incubators for innovation and a major source of employment. In fact, SMBs represent two-thirds of net new private-sector jobs and a majority of firms exporting goods.
As such, it’s important for SMBs to continue having the opportunity to grow and expand beyond domestic borders, and many are already doing so. More than half of the SMB executives recently surveyed by USForex have customers and suppliers outside of the U.S., 58 percent and 50 percent respectively. And a third employ personnel outside the U.S.
Related: A Framework for Expanding Your Business Internationally
With this confidence and evident momentum in going global, SMBs are looking to broader market rumblings and the possibility of future hurdles in order to better plan for their overseas growth. Here are few things SMBs are focused on and what can be done to prepare for them.
SMBs bullish on global economy.
SMBs are bullish about the global market, with 96 percent feeling confident about conducting business overseas. In the next year, nearly three-quarters (72 percent) of SMB executives expect to take on new international customers, up from the 58 percent who report having such customers today.
As business dealings become easier to manage across borders with new financial tools and resources that make digital commerce and globalization easier, businesses of all sizes are starting to navigate the international market’s choppy waters. Not to mention globalization, which has upped the ante in competition and is spurring SMBs to seek out higher quality suppliers and vendors as well as higher quality talent, 43 and 42 percent, respectively.
But SMBs need to remain strategic about how they approach international business. Though predominantly optimistic, there’s still some expressed concern about upcoming domestic and international events.
Related: 6 Ways to Leverage Global Innovation to Grow Your Business
What’s keeping SMB owners up at night?
Small business owners have been, and continue to be, concerned about what outcomes the current political climate might produce. The research that we recently commissioned found that the U.S. presidential election is the top concern, at 31 percent, for small business owners — ahead of global terrorism, international market conditions and the Federal Reserve increasing interest rates.
Outside domestic borders, concerns revolve around international market conditions and a lack of understanding of regional best practices. International commerce fees rounded out the list.
What should SMBs do next?
In a changing global business environment, it is essential that SMBs be thoughtful about planning, spending and location choices when leaping into new markets. For instance, SMBs should be aware of the price advantages of using foreign exchange specialists to help them navigate volatile market conditions — a cost-saving 89 percent of SMBs are currently missing out on.
Related: Opening a Second Location? Here's What to Keep in Mind.
As a small business looking beyond domestic borders, you will need to take advantage of current market conditions by looking for opportunities to cut costs and reprioritize your long-term goals. For example, knowing that the next Brexit steps (Article 50 of the Lisbon Treaty) are around the corner, are there ways for you to restructure your supplier and vendor relationships to take advantage of the weakened British pound? Are there opportunities for real estate investment in new European markets? Are you thinking strategically about how to move your money around the world to lessen the amount spent on currency fees?
Proper planning and forecasting can help you navigate global market volatility and opportunity. Is your growing business ready?