Have the necessary resources, a key requirement for foreign markets go
Contrary to what many people today say, about that SMEs have no choice but to internationalize, many companies are not prepared for export. The first key requirement to export is to be minimally prepared for it, and this requires having the necessary financial and human resources. If you do not have these resources, going abroad can end badly. When considering internationalization, one of the first issues to be analyzed is whether a company has the resources needed to address it.
With the crisis of recent years, many SMEs have sought foreign adventure debited without paying attention to their limitations, their lack of preparation.
The shortcomings of many of the SMEs that are coming for the first time to foreign markets have several aspects. First, lack of human resources, starting with something as simple as having staff who speak languages. Needless to say that his lack of preparation knowledge, operational foreign export markets, payments, transportation, etc., leaves much to be desired.
Second, many of these companies do not act with the necessary prudence. Some companies send supplies of goods on the basis simply to a request received from the outside, without analyzing the seriousness of the customer, without using a secure method of payment, uninsured operation.
The result of this insecurity, unfortunately on many occasions, is that defaults, lower revenues than expected occur (because there have been expenses that were not anticipated), delays in delivery of goods (with the corresponding penalty) because He not properly managed transport, rejection of the goods (that have not been met technical requirements), etc.
Apart from the specific damage to the company concerned, these situations can damage the external image of the company in general.
There is a line of thought (although today is clearly a minority) which postulates that SMEs are generally not prepared to export, and therefore should give up trying to export directly. Export must come indirectly, “dragged” by larger companies for which SMEs act as subcontractors. This position is also supported by several studies that have shown a clear correlation between firm size and export.
The answer to this question is not unequivocal. The key issue is whether it has the necessary resources to cope with an export activity: human resources, first; and financial resources in order to finance search activity and market development that normally requires time and expenditures to yield results.
In addition, SMEs should consider critically the mantra of the irreversibility of globalization. They must be aware that to get to foreign markets it is necessary to have a (human and financial) resources, apart from an exportable product. There may be very small businesses but are knowledge-intensive, their activity has a high added value, and have the necessary resources to successfully explore the possibilities of their products in international markets. These companies will succeed in exporting. But other SMEs, if they try to go out without these minimal means, they face very high risks.