Tim's Blog

Small to Midsized business in peripheral Europe – in Ireland, Spain, Greece, Portugal and Italy are in hard situation. Their domestic markets are in poor condition and hardly any profit could be made. The costs of production are becoming higher, and less people are willing to buy goods. The only option left in order to survive is to export to other countries, where people still have money to buy goods produced in Europe. Finding new export markets is a bright idea in order to increase revenue and possibly save business from failure, but it sounds easier than it really is. Small businesses in Europe lack competitiveness and European countries cannot devalue their currencies to make their products cheaper abroad. Entering new markets is always harder than staying in one, because of the costs business needs to pay in order to operate properly. The major obstacles which companies who tried to export to foreign markets met were legal problems, high costs for transportation, and overall running costs, as marketing. Competition from domestic and international companies was also a major issue.

It is very difficult to operate in other market, because people are very different. Pedro Fernández, chairman of Spanish construction equipment company General de Alquiler de Maquinaria says that Brazil is very hard market to expand to because Brazilian government is very protectionist and bureaucratic. People might think that it is easy for Spanish company to do business in Latin America because they speak the same language, in fact they are very different people.

Expansion to other markets is always very hard and has many obstacles. Small Business in Europe has little choice. Without operations in other markets small business in Europe is most likely to shut down, as they will not be profitable. Other markets allow small european companies to survive the unpleasant time in economy by selling their products abroad and increasing revenue of the company. The costs of exports are very high for the companies, but they are willing to pay them in order to save the business.

Original Article: http://www.businessweek.com/magazine/europes-small-businesses-seek-exportsfast-11102011.html

Image Source: Google Images