By Rieva Lesonski
Small and micro businesses (SMBs) are looking “beyond Main Street” and “plan to prioritize cross-border sales,” according to the seventh edition of Visa’s Global Back to Business Study. And it’s not just American business that has global growth in mind. The study surveyed consumers and small businesses in 10 international markets: Australia, Brazil, Canada, Germany, Hong Kong, Ireland, New Zealand, Singapore, the United Arab Emirates (UAE) and the United States.
The global move is driven in part by the adoption of new technologies by entrepreneurs, including digital payment solutions such as cashless transactions. This is critical as the survey also revealed that 55% of consumers expect to increase their use of digital payments this year.
The Covid-19 pandemic has halted the growth plans of many small businesses. But many entrepreneurs are returning to work. Jenny Mundy, Visa’s global head of merchant sales and acquisition, says they are “seeing the mindset of small businesses shift from survival mode to growth mode as SMBs harness the power of digital payments, to improve efficiency, reach new audiences and simply thrive in today’s increasingly digital world.”
Mundy adds, “It used to be that only large enterprises could scale to access customers across the country or the world, but today’s small business owner can be virtually limitless.”
The latest small business thinking
The Global Back to Business Study shows how SMEs are changing their mindset:
Ready to explore the world
Seventy-nine percent of business owners surveyed said they are focusing their growth strategies on “expanding into new geographies.” Small in-store and online retailers are even more ambitious, with 90% saying they see cross-border sales as an opportunity for growth.
And the world is ready – 72% of consumers say they are now comfortable making global purchases. Some consumers are still hesitant about shopping globally, but said card protection (50%), positive reviews (43%) and delivery guarantees (34%) would increase their comfort level and encourage them to global purchases.
Plan to go cashless
This is an aspiration for almost all small businesses surveyed – 95% of entrepreneurs say they plan to be cashless “someday”. But some of the smaller companies are more motivated – 35% recognize that accepting new forms of payment is an opportunity to reach new customers, and 51% plan to go “cashless” in the next two years by embracing the use of mobile payment apps (55%), mobile wallets (50%) and contactless cards (36%).
To reach new customers, surveyed business owners plan to increase their social media presence (44%), offer new products or services (41%), and invest more in marketing in general (40%).
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The new consumer mindset
No matter who or where your customers are, it’s important to understand the current consumer mindset. Eighty-two percent of shoppers say they already use digital payments for an average of 58% of their shopping, 55% of consumers plan to increase their use of digital payment tools, and 40% plan to switch to cashless payment. In addition, 59% of consumers have abandoned a shopping cart after realizing that digital payments are not available.
Another factor driving customer sales is sustainability – 68% of consumers say a company’s sustainability practices have at least “some influence” on their decision to buy from them. And 77% say they will pay more for sustainable products and services.
In addition to shopping globally, surveyed consumers plan to invest their time and money locally. Nearly half (49%) say they will support their local economies and shop more from local businesses in the next year, and 44% plan to make personal connections in their communities. If you own a physical store, consumers expect you to accept contactless cards (57%), mobile payment apps (49%) and mobile wallets (49%).
Digital payments also encourage local customers to tip more often, with 77% of consumers saying they’ve noticed more stores accepting (and even encouraging) the use of digital payments for tipping, and 43% of those consumers feeling more -high pressure to tip.
Small business and new technologies
In addition to adding digital payment solutions, 91% of small businesses are “at least somewhat likely” to consider using automation and AI services like ChatGPT in the next 12 months “to help elevate their business against competitors.”
Embracing new technology solutions is a somewhat intimidating concept for most of the business owners surveyed. Only 33% say they are “completely confident” in their ability to grow their business and “keep up with changes in technology and consumer preferences.” Many more (67%) say they are less confident in handling these tasks.
Many of the small businesses surveyed are also concerned about cyberattacks, with 67% saying they don’t think their companies can fully recover from a fraud incident or cyberattack.
SMEs ‘not too small to go global’
The Small Business Administration (SBA) encourages entrepreneurs to do business internationally, stressing that small businesses are “not too small to go global.” The SBA says that small businesses that engage in exporting “are more likely to increase their bottom line, expand their footprints, grow at higher rates and employ more people.”
The agency adds that selling internationally is a smart way to diversify your customer base while protecting your business from the “ebb and flow” of the US market.
About the author
Rieva Lesonski is the CEO of GrowBiz Media and SmallBusinessCurrents.com and covering small business and entrepreneurship for over 30 years. Get more information about business trends by signing up for it Free of charge Currents newsletter.
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