subject: Smes Going Global [print this page] There is a popular, yet flawed perception that SMEs do not have the wherewithal to engage in export business. The reasons behind such a perception are the small size as well as the economic capabilities of the SMEs. However, it must be noted that the visibility of a company in the global market does not necessarily depend on the size; what is necessary is the quality of products and services provided by the company, which adds to its credibility. In fact, it is the small businesses that are majorly engaged in the export business.
It has been noticed that most small and mid-sized companies first target at gaining recognition in the domestic market and thereafter begin to export goods to foreign markets. In this manner, the companies not only earn higher profits but also make its presence felt at the global level, which aids expansion of their business as well as customer base, says Suresh Arora, proprietor of Imperial Exporters, a small-sized apparel export company in Jaipur. The experience gained in the domestic market also aids the SME companies to improve and innovate their products and utilise latest technology and marketing strategies, thereby fostering growth.
Benefits of exporting
There are certain advantages that prompt SMEs to target international markets. It has been observed that with the increase in supplies for a larger market, the cost production per unit goes down.
Companies that take the risk of diversifying not only earn higher profits but are relatively more secured even at times when the domestic market experiences a turbulent phase, says Akash Gupta, proprietor of Globe Limited, a small-sized export company in Bengaluru.
Companies that export goods are also at an advantage as they can fetch higher prices in the international markets, as compared to the domestic market and can also sell off their stock of goods in the international market, which is in less demand at the home turf. Therefore, SME companies should aim at expanding their business by targeting the international market.
by: David Parks
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