
April 24th, 2018 by James Harkness
Despite globalisation removing barriers to overseas expansion, it appears that SME owners are not yet convinced of the benefits. Recent data from Bentleys, a mid-tier accounting and business advisory firm, found that only 19% of Australian and New Zealand businesses operated in overseas markets.
The latest The Voice of Australian Business survey, a bi-annual national survey of SMEs, revealed that a majority of businesses operating overseas are medium-sized, rather than small or micro, with the most common markets for expansion being the USA, UK and Asia.
Scott Field, Associate Director, Bentleys Queensland suggested the low number of businesses operating globally could signify that SME owners feel the risk outweighs the advantages.
“SME owners can be risk-averse in thinking about going global. For them, international markets may present exciting growth and diversification opportunities but it can also present challenges. This fear often comes from a lack of knowledge in how to make the transition from a local to global business,” said Field.
The survey revealed the largest barrier to overseas expansion was a lack of interest (38%) or lack of perceived value, followed by physical distance (35%) and not knowing how to operate outside of Australia (15%).
Field said that while it can be a challenging process for many, overseas expansion can provide opportunities for unparalleled growth, provided SME owners have done their due diligence.
“Going global requires an understanding of the local regulatory compliance framework, from tax and custom laws, to securitisation of intellectual property and asset protection, to appropriate business structuring, so as to identify and mitigate any potential risks,” Field said.
“This is where the need for an established relationship with an advisor, who has an understanding of working with businesses expanding globally, comes into play.”
For those SMEs looking to expand into the overseas market, Field recommends the below:
Other key findings from the survey around overseas expansion include: