30 million registered businesses in the U.S., less than 1% do business internationally, and 60% of those businesses do business with only one country: Canada. By comparison, about 10% of companies in other developed countries do business internationally.
Savvy companies looking for growth opportunities pay attention to groups of countries with growth rates far above the international average. The BRICS (Brazil, Russia, India, China and South Africa) have seen average annual GNP growth above 5% over the last decade, and the International Monetary Fund sees only a slight slowdown in these countries over the next decade. Other groups of emerging economies lumped together as the MISTs (Mexico, Indonesia, South Korea and Turkey) and Next-11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam), while having projected growth rates less than the BRICS, are still expected to have economies that grow faster than the U.S. in the near future.
Company leadership generally think of international expansion four different ways – Baker Tilly suggests how they should consider these mindsets.
“International markets may be good for other companies, but not for us.”
Businesses should look to see if their competitors do business abroad. If yes, this would be an indication there is an international market for that business. You do not need to have a breakthrough product to experience breakthrough growth outside the U.S.
“Maybe there is a market, but we don't know if there's demand for what we offer.”
Mexico alone is an example of a growing economy where domestic companies cannot keep up with the demand for goods such as automobiles, which creates opportunities for U.S. companies.
When you have economic growth in a foreign market, it drives demand. That demand for products fosters competition and appetite for things that are distinguished—like a U.S.-made product.
"Isn’t it risky?”
The short answer is yes, but organizations can tap into a wealth of external resources and methodologies for international expansion to mitigate that risk.
Gain a better understanding of your organization’s appetite for growth with our global market risk self-assessment.
“OK, we want to do business abroad; but how?”
Organizations with no international business experience should avoid a patchwork of resources and a lot of hope as their strategy. Some organizations who have tried expansion unsuccessfully in the past may make a strategic hire to try again. Those gaining international business success still face challenges in sustaining that business and often work with external consulting or advisory resources.
Expanding your channel footprint abroad is one solid strategy that can accelerate sales. If your U.S. growth prospects are mature, stagnant or declining, there is little downside to unlocking sales of products and services internationally. However, organizations have to act fast in doing the due diligence to identifying new markets and moving in, because opportunities are finite, and market conditions can change rapidly.
If you are wondering whether international sales growth is a fit for you, please reach out to us — we would be happy to share our perspective.