Social and digital communications: powering the international growth of SMBs

Technology is critical to SMB expansion

SMBs (small and medium-size businesses) are the backbone of the economy, employing 15 million people in the UK and generating turnover of £1.6 billion. Recognising their potential for growth, particularly via international markets, the government has put SMBs at the heart of its plans for recovery.

A recent survey we conducted with YouGov reports six out of 10 UK SMBs expect to be doing business internationally by 2016. That's an increase of 20% on current numbers, meaning around one million additional SMBs plan to expand their business beyond the UK in the next year or so.

The survey also revealed a new breed of young entrepreneurs more inclined to be exploring emerging growth markets and using social and digital communication channels to build and maintain the relationships they need to succeed.

Emerging markets

Western Europe is still where most SMBs are doing their international business, followed by North America, but companies ahead of the game are setting their sights on developing markets in Asia, particularly India, South Korea and China, where sales of consumer goods in particular are booming.

China is the world's fastest growing major market. Trade between China and the UK hit a record high in 2013 of more than £43 billion, with UK exports to China growing more than any other EU country. A new generation of wealthy workers, happy to spend on themselves, has pushed demand for British luxury brands such as Burberry and Church's shoes, with even TV formats such as Strictly Come Dancing and MasterChef enjoying the export explosion.

The internet has paved the way for companies to sell directly into new markets, but the survey shows that local partners, in the form of agents, distributors or affiliates, are still considered vital to good business. Nearly three quarters say partners outside the UK will be 'important' to their business in 2016, with just under half describing them as 'very important'.

This personal connection in the business world is nothing new. It's human nature to want to build trust with someone before signing a contract. Successful companies understand the importance of getting to grips with the cultural nuances and sensitivities of the country they're dealing with to nurture this trust, and this is particularly true of Chinese culture embedded in traditional philosophies that prize patience and harmony.

What has changed is that rather than relying on traditional ways of doing business such as phone and email, more SMBs, particularly those with managers and owners under 45, are using social and digital communications channels to build and maintain international relationships.

Productivity gains

Face-to-face contact has always been critical to business relationships. Whereas in the past that's meant jumping on a plane, videoconferencing is increasingly complementing or even replacing business travel. It gives SMBs the opportunity to capitalise on previously unproductive time spent en route to meetings.

A third of SMBs trading internationally say they are already using videoconferencing to communicate with business partners, even more among those run by under-45s. This same group also uses social networking and instant messaging to stay in touch and is more likely to be moving towards online project management tools with partners overseas.

These increasingly sophisticated ways of connecting are unlikely to completely replace the benefits of meeting face-to-face, but rather than spending precious annual budget and carbon footprint transporting staff to entertain clients overseas, small companies have the option of cheaper and more simple ways of competing in the international marketplace.

  • Andrew Millard is Senior International Marketing Director for the SaaS division of Citrix