In 1997, in Taipei, Taiwan I met a businesswoman exporting sewing accessories to markets worldwide, generating over $1 million annually, her husband, meanwhile, operated a separate export business dealing in spectacle frames, with even greater volumes. They ran their businesses side-by-side from adjacent offices, with their grandmother caring for the children. This family-run operation not only thrived but also weathered market fluctuations due to their diversified global sales.
In an increasingly interconnected world, small-to-medium-sized businesses (SMEs) are well-positioned to tap into global markets and secure their future against economic uncertainty. Countries like Germany, Taiwan, Japan, and South Korea are prime examples, where SMEs thrive by actively engaging in international trade. Diversifying sales across the globe has proven to be a robust strategy for mitigating risks and recession-proofing businesses.
Relying solely on one market or economy makes businesses vulnerable to local economic downturns. However, by dividing your sales pie across multiple countries and regions, you can smooth out the shocks of a single country’s recession. If one market experiences a slowdown, strong sales in other markets can keep your revenue steady, ensuring your business remains resilient.
Export to Recession-Proof Your Business. Here is what you will ain from it:
1. Expand Demand Horizons
More than 95% of the world’s consumers live outside any single country. Limiting your sales to one market means missing out on the vast majority of potential customers. Diversifying sales globally enables your business to tap into this enormous demand, providing a steady flow of opportunities.
2. Reduce Dependency
Selling in only one market ties your success to the economic health of that market. Expanding internationally reduces dependency on a single economy, helping you weather local recessions, currency fluctuations, and political instability.
3. Leverage Accessibility
Exporting has become more accessible than ever. The Internet, improved logistics, free trade agreements, and eCommerce platforms make entering global markets easier, even for the smallest businesses. Additionally, governments and international organizations provide robust support to help SMEs succeed in exporting.
4. Boost Profitability
Companies engaged in exporting typically experience faster sales growth, create more jobs, and pay higher wages than those focused solely on domestic markets. Diversifying your sales pie geographically can lead to long-term profitability and sustainability.
5. Achieve Competitive Advantage
As your export volumes grow, your costs per unit decrease, allowing you to become more competitive in both international and domestic markets. This competitive edge can help your business stand out in an increasingly crowded marketplace.
6. Increase Resilience
Global diversification makes your business more resilient to economic downturns in your home market. If one region faces a slowdown, steady sales in other regions can provide a much-needed buffer.
Resources to Help You Diversify
Embarking on a global journey may seem daunting, but numerous resources are available to guide you through the process. From market research to trade regulations, these tools can help you identify the right markets and make informed decisions:
• International Trade Administration (trade.gov)
• Centre for the Promotion of Imports (CBI)
• TradeMap
Take the First Step
Recession-proofing your business starts with a decision to expand your horizons. By diversifying your sales across multiple countries and economies, you can reduce risk, ensure stability, and set your business on a path of sustainable growth.
The world is a big place, and the opportunities are vast. Don’t wait for the next economic downturn, to take action. Start dividing your sales pie today and secure a future where your business can thrive no matter the economic climate.
Are you ready to make your business resilient and recession-proof? The time to act is now!
Imtiaz Rastgar works as a business coach and consultant and can be reached at www.pmx.com.pk, [email protected], +92–334–593–3391