Article

Acquiring an international expansion mindset

March 6, 2020

30 million registered businesses in the U.S., less than 1% do business internationally, and 60% of those businesses do business with only one country: Canada. By comparison, about 10% of companies in other developed countries do business internationally.

Savvy companies looking for growth opportunities pay attention to groups of countries with growth rates far above the international average. The BRICS (Brazil, Russia, India, China and South Africa) have seen average annual GNP growth above 5% over the last decade, and the International Monetary Fund sees only a slight slowdown in these countries over the next decade. Other groups of emerging economies lumped together as the MISTs (Mexico, Indonesia, South Korea and Turkey) and Next-11 (Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, Philippines, Turkey, South Korea and Vietnam), while having projected growth rates less than the BRICS, are still expected to have economies that grow faster than the U.S. in the near future.

Company leadership generally think of international expansion four different ways – Baker Tilly suggests how they should consider these mindsets.

International expansion: yes or no?

“International markets may be good for other companies, but not for us.”

Businesses should look to see if their competitors do business abroad. If yes, this would be an indication there is an international market for that business. You do not need to have a breakthrough product to experience breakthrough growth outside the U.S.

“Maybe there is a market, but we don't know if there's demand for what we offer.”

Mexico alone is an example of a growing economy where domestic companies cannot keep up with the demand for goods such as automobiles, which creates opportunities for U.S. companies.

When you have economic growth in a foreign market, it drives demand. That demand for products fosters competition and appetite for things that are distinguished—like a U.S.-made product. 

"Isn’t it risky?”

The short answer is yes, but organizations can tap into a wealth of external resources and methodologies for international expansion to mitigate that risk.