Attention SMEs: The “next big thing” for your company is probably overseas!
As an SME leader, your top priority is to grow your company. You understand that building a pipeline of work, securing recurring revenue and scaling your business depends upon identifying opportunities and being prepared to capitalise on them.
What you may not have realised is that the “next big thing” for your company that once in a lifetime opportunity, is probably waiting for you somewhere offshore.
In fact, there has never been a better time for Australian SMEs to look abroad, particularly in the services sector. International travel is less expensive than ever before. Technology has made it possible to meet clients, employees and partners in the comfort of your own office and to sell goods and services overseas without ever leaving your own city.
Record low interest rates are supporting economic activity and the low Australian dollar is making it easier than ever to export Australian goods and services.
Australia’s trade agreements with the United States, Singapore, New Zealand, Thailand, China, Japan and South Korea are also reducing barriers to exports of goods and services.
Nonetheless, less than 10% of Australian SMEs are exporting or operating offshore? What’s going on? Lack of awareness is one key problem and lack of expertise is another. Many companies are unaware of the size of the opportunities on offer and many others know that opportunities exist, but don’t know what they look like or how to capitalise on them.
Dearin & Associates’ international networks and dealings in-market mean that we are plugged into broader demand trends as well as specific requests from stakeholders for Australian goods and services. We’ve also worked with and come across some of Australian business’ biggest international success stories.
So we know that right now, in a number of the key markets that we work in, governments, industry players and consumers need what Australian companies (even micro-businesses) have to offer. If you’re looking for an overseas opportunity to seize, here are some markets hungry for your product, and some examples of how other Australian companies have successfully built their business through international expansion.
United States - Something for everyone … especially in services
Trump may be in the White House, but that doesn’t mean that America’s vast and vibrant economy has come to a standstill. You could launch pretty much any kind of business in the US and have a reasonable chance of success, even if you’re small.
Queensland jeweller, Margot McKinney is one great example of a small Australian business who has taken the States by storm. Operating from Fortitude Valley, Queensland, McKinney launched into the US market a decade ago, and her designs are now sold across the country and worn by Hollywood icons, including Dita von Teese.
There is also almost limitless potential in the US services sector in areas as diverse as online marketing, pet care (Americans spend more than $40 billion each year on their pets), e-commerce, mobile and social gaming, restaurants, environmental consulting, aged care, transport and logistics and private security.
United Kingdom - Technology, high value manufacturing and services
Even though the UK market is mature in many respects, there are still a truckload of opportunities on offer and available niches to fill. The high-value manufacturing and technology sectors are both going strong, but you don’t have to be a tech geek or to start a business there and many Australian businesses have successfully set up in the UK. Examples include Dent, a company that runs the Key Person of Influence program for small business. Dent was created by two blokes from Maroochydore, Queensland, Glen Carlson and Daniel Priestley, who later exported it to the UK (and bunch of other places).
Indonesia - Infrastructure, Services and Healthcare
Indonesia is the world’s 16th largest economy, Australia’s second-closest neighbour and has a burgeoning middle class. As its economy diversifies away from resources, vast opportunities are opening up for Australian business. The Australian government has recognised this potential and recommenced negotiations on the Indonesia Australia Comprehensive Economic Partnership Agreement in March 2016.
Part of Indonesia’s diversification push has been to de-regulate and massively expand its infrastructure creation efforts in areas like transport, oil and gas and healthcare. One Australian architectural firm, recently approached us looking to pursue work in a number of different new hospital projects throughout the archipelago.
Indonesia’s middle class is also generating consumer demand in education, tourism, IT, professional services and healthcare, each of which is an Australian industry strength. In the healthcare sector, for example, Blackmores is one Australian company which has seized on this opportunity, signing a joint venture agreement with Kalbe, Indonesia’s largest pharmaceutical company in September 2016.
The Middle East - Food, FMCG, Education and Training, Renewables and Waste Technology
The oil-driven economies of the Middle East benefit from enormous wealth and booming populations, but face multiple challenges to the ongoing prosperity of their economies. One pressing need is securing food supply for the largely arid region. On a recent visit to the Middle East, our Managing Director, Cynthia Dearin met with a number of key players in Saudi Arabia who expressed interest in joint venture arrangements with innovative Australian food technology companies.
Saudi Arabia’s middle class is also growing rapidly, generating demand from consumers, especially in the dining and food service sectors. We are aware of several Australian small businesses that are moving to capitalise on that trend, setting up franchise agreements in the Kingdom.
Demand for specialty coffee and gourmet food is also burgeoning in places like Dubai, Abu Dhabi and Qatar and Australian small businesses including Jones the Grocer (which went bust in Australia but is going gangbusters overseas), Tom & Serg and the Sum of Us have already capitalised on this trend.
The FMCG sector is also heating up across the Gulf and our consultants in the UAE tell us that there are companies looking for Australian FMCG businesses to invest in.
Back in Saudi Arabia, vocational education is also a hot topic, as the Saudi government looks to upskill its workforce. If you have products or services, particularly in health, education and training, food sufficiency, mining, civil security, advanced manufacturing and technology where you can train and empower Saudis, particularly women, young people and regional Saudis, you will have a potential market in Saudi Arabia. If you are in education and training and are an expert in leadership training, coaching and career development, you have an opportunity to train the next generation of Saudis. All exciting stuff (check out the case study of Miles Morgan here, who have done just that).
While oil may be the source of the Middle East’s wealth governments in the region, diversification efforts and sustainability have seen significant investments made in the renewables and waste technology sectors in recent years. In January, the UAE government announced $163bn in clean energy projects. Given this interest we’ve received multiple requests in the last 12 months from our in-market partners to source Australian investment projects in the renewables space.
China - Fresh Produce … and the rest
Access to high-quality, healthy, “clean and green” produce is also a major priority for the world’s largest population.
Australia’s reputation in the agricultural and food innovation sectors positions us to meet this demand, as Chinese consumers will pay top-dollar for highly-coveted, luxury produce and health goods. Australian wine-makers and producers of health products and baby formula have already started cashing in, as have operators in the tourism sector, and we know that opportunities exist for Australian seafood producers in high-value Chinese markets.
Asia - Professional services and IT
Although education and tourism are major exports for Australia, there is a big gap in advanced services including legal services, IT, accounting, health, engineering, architecture and finance. All of these fields are growing strongly within Australia, but most of these services aren’t making it into international markets in any significant way.
The only way these sectors can continue their growth trajectory is to push overseas. Asia offers an obvious market and Australia benefits from significant market access under free trade agreements with key economies in the region. Rapid economic growth and growing middle class populations are also driving demand for quality services throughout Asia.
Small Australian businesses are already taking the initiative in this sector and Dearin & Associates Senior Advisor, Michael Lee recently helped WebProfits, a small IT services business setup an office in Singapore.
The opportunities listed above are just a tiny slice of what’s on offer, but you get the picture, For small businesses, the world really can be your oyster.
If you’re dreaming of getting new clients from overseas or expanding offshore but don’t want to go it alone, check out the International Business Accelerator for SMEs.