Globalization For Small Business

“Globalization.” It’s a big word and not universally popular. There is a view that “globalization” will make the whole world look the same with no regional differences between nations. Others take the view that it will increase poverty in some countries. Equally, in the Multinational Search column, we are sometimes guilty of talking as if the only organizations who need to think about “globalization” are large ones. This is definitely not the case and so I’d like to set the record straight as well as pointing you at some fascinating articles in the Small is Beautiful column which make great reading. My focus here is on the global opportunity for small businesses.

On my travels, I regularly talk to people about “export” and going global, and one of the commonest reactions is, “I haven’t yet cracked my domestic market yet—I’ll think about the rest of the world later.” It has also been a trend throughout the current economic crisis that organizations have reduced, rather than expanded, their international efforts for the simple reason that “It’s very easy to get things wrong internationally and end up losing money.” I do sympathize with both of these points of view, but the same time there are a great many who draw the above conclusions who could actually make a substantial difference to their business by tapping into existing international opportunities.

The web is the new village

My closest UK city is York—that’s the original one that New York was based on! Its main claim to fame is that a few decades ago, a long buried Viking village was uncovered while a shopping mall was being constructed. The result is you can now take a tour around a Viking village and look at all the artifacts that were uncovered. What this reveals is that craft and trade nature of a Viking village with each member of the community developing a skill they could barter with other members of that same local community.

So, let’s now imagine you were a shoemaker looking to develop and grow your business making and selling shoes. You might have had 6,000 feet you could potentially supply, each of which might have needed a shoe every year or so. With little competition, that could be quite a good business where you might want to employ a couple of others to help you satisfy the demand.

Let’s imagine now that you make and sell “party shoes.” If you examine Google’s keyword tool, you’ll see that there are just 2,400 searches for party shoes in the whole of the US, while “shoes” are sought some 4,090,000 times each month. So, if you lived and traded in just a small village of a few thousand people the demand for party shoes is going to be—well—small. You’ve a simple choice. Either you go and find other villages to add to your customer base, or you revert to making “shoes.” The problem is your shoes look great (so they’re fab for parties) but they don’t hang together too well as everyday shoes.

In other words, if you expand your customer base, you may be able to focus on what you’re really good at and where you show the competition a clean pair of heels!

Inexpensive research tools

Let’s turn now to how the web can help. The first thing you need as a potential new exporter is lots of information about your potential marketplace. My favorite tool of all time in this context is Google’s Keyword Tool closely followed by Google Insights for Search—both fantastic free resources that you can log onto from my desk and find out what’s moving and shaking.

Bill Hunt talked about the Google Export Tool in his piece on Export Planning recently. While useful, this tool has serious limitations and shouldn’t be relied on to make decisions on export—think of it as a brainstorming area. It recommended Spain as a target market for our “party shoes”—rather than France—which is mainly because the word used in the Spanish translation is “fiesta” translated for “party” which clearly has many different uses in Spanish. But the French translation jumps for “partie” meaning “share” rather than “fête” where you go to have fun. It may well be that France is a much better target than Spain in reality. Google’s Keyword Tool works much better but you do have to have already researched keywords to begin with.

The above image gives Google Insight results for “partyschuhe” which is a popular search term in German for “party shoes.” Unfortunately, Google Translate (and therefore Google’s Export Tool) gives “party schuhe” as the search term which produces different results in terms of keyword volumes. Most importantly, interest in party shoes in Germany appears to be growing—which is certainly good news!

You don’t even have to pay for localization

There are at three main ways in which you can go global without even worrying about funding a translation or localization of your website. The first is to target areas of the world where English is spoken. You’re fortunate—this already opens up vast market opportunities.

The second way is to work with viral tools—namely social media vehicles such as Facebook.com, where other people will promote your “party shoes” in the right target language without you having to do anything. I’ll be returning to this topic in a future article.

Third, you can investigate the opportunity for agents and distributors of your product via sites such as Alibaba.com, which is effectively a business-to-business matchmaking site. Here you can find interested partners all over the world who are looking to help represent you to their nation.

Limited resources and yet still global

At board level discussions (which might in your case mean around the kitchen table) there may well be concerns about how you’re going to find resources for such a global effort—including delivery to far flung places such as Sheffield or Timbuktu (a little local Yorkshire joke in there). What the web makes possible—in ways the Vikings could never even have dreamed of—is the possibility to link up and outsource parts of our service to enable your global effort.

So for instance, you can now set up and manage a call center to deal with all the customers you’ve ever dreamed of, you can outsource and manage a logistical delivery organization, you can set up and manage online processes to deliver effective customer service post sale and you can track what’s going on globally by the second from your iPhone or Blackberry while watching the TV.

No longer a niche except in the best of ways

The neatest thing about “niches” is that they are a very effective method of knowledge management and very much reflect the human condition. If you’re a specialist in “pink party shoes” then you can pretty much guarantee that you’ll be the world’s greatest expert on pink party shoes that ever lived.

Oddly though, you have to throw the connection that “niche” often has with small markets. Think back to the York Vikings. If he’d done a good job with the “shoes” niche—a very small market when people began wearing shoes—he’d be serving a market that searched for shoes some four million times each month and certainly buys them in huge quantities today. Assuming he’d done a reasonable job of making the shoes, he be an extremely wealthy Viking today!