Advances in technology, communications, and transportation have transformed the world into a global village, and small and medium-size enterprises (SMEs) can take advantage of this.
Beyond any short-term gains they may make, SMEs also gain experience in performing on a larger stage.
Entrepreneurs and SMEs often go global in response to the state of their domestic market environment.
To be successful, SME managers and entrepreneurs who engage in international trade must demonstrate high levels of passion, motivation, competence, and advocacy support.
Development of an international perspective, or global mindset, facilitates engagement in international business.
From a practical perspective, entrepreneurs and SME managers must broaden their horizons and sharpen their skills to successfully engage with the international arena.
Entrepreneurs and small business owners are motivated to solve problems or deliver services better, faster, cheaper than others in the market. Entrepreneurs harness creativity and innovation to seize opportunities and offer alternatives in the marketplace. Successful entrepreneurs manage risk by closely monitoring business processes and financial obligations, as well as by focusing intently on their market and the challenges of building market share. With democracy encircling the globe and once-rigid barriers to free trade being eroded, the entrepreneur in many industry sectors seeks opportunities beyond his/her local region or country in a worldwide market. Adopting a global strategy can enable a small company to enhance its growth in the face of increased competition. In some instances, a global strategy is necessary, especially when facing competition from abroad. Today’s more open world business environment is not risk-free; indeed, no market strategy is risk-free. Small and medium-size enterprises (SMEs) must recognize that doing business internationally involves added dimensions of uncertainty and risk, such as fluctuation in world currencies, global (regional) economic and political unrest, and inconsistencies in the global supply chain.
The US Small Business Administration estimates that approximately 25% of all US export volume (in dollars) is attributable to small businesses.1 In terms of the number of US companies engaged in international trade, “97 percent of all exporters are small and medium size companies.”2 A recent survey of SME CEOs revealed that 56% look favorably on engaging in international business, with fewer than 20% considering it a threat.3 Among countries in geographical proximity, as in Europe, the prevalence in terms of both the value of international trade and participation by SMEs is infinitely greater. It must be remembered that international trade is a two-way street. Indeed, import activity among American companies is far greater than export activity, a fact that shows up in the year-on-year trade deficits recorded by the United States in recent decades.
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