7 SME Meaning Business Tips for Export Management Success
Small and medium-sized enterprises (SMEs) are the backbone of many economies, but they often face challenges when it comes to exporting their products or services to foreign markets. Exporting can be a great way to grow your business, diversify your revenue streams, and reach new customers, but it also requires careful planning, research, and strategy. In this article, we will share some tips on how to meaning business as an SME in the global market and achieve export management success.
Tip 1: Know your target market
Before you start exporting, you need to have a clear idea of who your potential customers are, what their needs and preferences are, and how your product or service can solve their problems or satisfy their desires. You also need to understand the cultural, legal, political, and economic factors that may affect your export operations in your target market. Doing market research can help you identify the best opportunities, avoid potential pitfalls, and tailor your marketing mix accordingly.
Tip 2: Choose the right export mode
There are different ways to export your product or service, such as direct exporting, indirect exporting, licensing, franchising, joint ventures, or foreign direct investment. Each mode has its own advantages and disadvantages, depending on your goals, resources, and capabilities. You need to weigh the costs and benefits of each option and choose the one that suits your business model and strategy best.
Tip 3: Build a strong export team
Exporting is not a solo endeavor. You need to have a team of people who can handle the various aspects of exporting, such as sales, marketing, logistics, finance, legal, compliance, and customer service. You also need to have external partners who can support you in your export activities, such as distributors, agents, freight forwarders, customs brokers, banks, lawyers, accountants, and consultants. You need to communicate clearly with your team and partners, establish roles and responsibilities, and monitor performance and feedback.
Tip 4: Manage your risks
Exporting involves a number of risks that you need to anticipate and mitigate. These include currency fluctuations, payment delays or defaults, trade barriers or restrictions, intellectual property rights infringement, quality issues or complaints, political instability or violence, natural disasters or pandemics, and ethical or social issues. You need to assess the likelihood and impact of these risks and take measures to reduce them. For example, you can use hedging strategies to protect yourself from currency fluctuations, use trade finance instruments to secure payment from buyers, obtain insurance coverage for your shipments or assets abroad, register your trademarks or patents in your target markets, implement quality control systems and standards, and follow the local laws and regulations.
Tip 5: Adapt your product or service
Your product or service may not be suitable for every market. You may need to modify it to meet the local requirements or expectations of your customers. This may involve changing the design, features, packaging, labeling, pricing, or promotion of your product or service. You may also need to provide after-sales support, warranty, or training for your customers. You need to balance the degree of standardization and adaptation of your product or service according to the market conditions and customer preferences.
Tip 6: Promote your brand
Exporting is not only about selling your product or service; it is also about building your brand reputation and awareness in the global market. You need to create a unique value proposition that differentiates you from your competitors and showcases your strengths and benefits. You also need to use effective marketing channels and tools to reach your target audience and communicate your message. You may use online platforms such as websites, social media, blogs, or podcasts, or offline channels such as trade shows, exhibitions, events, or media relations. You may also leverage testimonials, case studies, or referrals from your existing customers or partners.
Tip 7: Learn from experience
Exporting is a learning process that requires constant improvement and innovation. You need to monitor your export performance and results regularly and evaluate what works and what doesn’t. You also need to collect feedback from your customers and partners and use it to improve your product or service, marketing strategy, and customer satisfaction. You also need to keep abreast of the latest trends and developments in your industry and target markets and adapt accordingly.
Exporting can be a rewarding but challenging endeavor for SMEs. By following these tips on how to meaning business as an SME in the global market, you can increase your chances of export management success.
The Global Demand for SMEs
Small and medium-sized enterprises (SMEs) are businesses that have revenues, assets, or a number of employees below a certain threshold. The definition of an SME varies from country to country, but generally, they are considered to be the backbone of the economy, providing jobs, innovation, and growth. According to the World Bank, SMEs account for about 90% of businesses and more than 50% of employment worldwide.
However, SMEs also face many challenges, such as access to finance, markets, technology, and skills. The COVID-19 pandemic has exacerbated these difficulties, disrupting supply chains, reducing consumer demand, and imposing lockdowns and social distancing measures. According to a survey by the International Trade Centre (ITC), 60% of SMEs reported being strongly affected by the crisis in 2020.
The Future of SMEs in a Post-Pandemic World
Despite the hardships caused by the pandemic, SMEs also have opportunities to adapt and thrive in a post-pandemic world. Some of the trends that could shape the future of SMEs include:
– Digital transformation: The pandemic has accelerated the adoption of digital technologies by SMEs, such as e-commerce, cloud computing, artificial intelligence, and blockchain. These technologies can help SMEs improve their productivity, efficiency, resilience, and competitiveness. According to a report by McKinsey & Company, digital SMEs can increase their revenues by up to 15% and reduce their costs by up to 20%.
– Green transition: The pandemic has also raised awareness of the environmental and social impacts of business activities. SMEs can benefit from adopting green practices, such as reducing their carbon footprint, using renewable energy sources, and implementing circular economy principles. These practices can help SMEs lower their operational costs, enhance their reputation, and access new markets. According to a report by the European Commission, green SMEs can increase their profits by up to 16% and create more jobs than non-green SMEs.
– Global integration: The pandemic has highlighted the importance of global cooperation and solidarity. SMEs can leverage their agility and innovation to tap into new opportunities in the global market, such as participating in regional and global value chains, exporting their products and services, and forming strategic partnerships with other SMEs or larger firms. According to a report by the Organisation for Economic Co-operation and Development (OECD), SMEs that are internationally active can increase their productivity by up to 34% and their growth by up to 7%.
SMEs are vital for the recovery and resilience of the global economy in the aftermath of the pandemic. To succeed in this new environment, SMEs need to embrace digital transformation, green transition, and global integration as key drivers of their competitiveness and sustainability.
References:
http://ec.europa.eu/enterprise/policies/sme/files/sme_definition/sme_user_guide_en.pdf
http://www.iwim.uni-bremen.de/publikationen/pdf/b101.pdf
https://www.worldbank.org/en/topic/smefinance
https://www.intracen.org/covid19/impact-on-sme/
https://www.mckinsey.com/~/media/McKinsey/Industries/Public%20and%20Social%20Sector/Our%20Insights/Unlocking%20digital%20opportunities%20for%20small%20and%20medium%20enterprises/Unlocking-digital-opportunities-for-small-and-medium-enterprises.pdf
https://ec.europa.eu/environment/ecoap/sites/ecoap_stayconnected/files/pubs/sme_greening_en.pdf
https://www.oecd.org/cfe/smes/ministerial/documents/2018-SME-Ministerial-Conference-Key-Issues.pdf
https://www.trade.gov/export-solutions
https://www.sba.gov/business-guide/grow-your-business/export-products
https://www.export.gov/article?id=Seven-Steps-to-Successful-Exporting
