When most small businesses think of innovation, they tend to imagine ground-breaking inventions and revolutionary technologies. Yet most innovations are evolution rather than revolution.
There are many areas in which innovation can turbo charge a small business’s exporting journey. Here are three ways small businesses can use innovation to get ahead overseas.
Identify ways to innovate your products and services
Small businesses should take the time to research and learn the special needs of an overseas market. Adapting existing products or services to a new market is a proven route to export success.
Exporting also provides an opportunity to capitalise on innovative product features with unique appeal offshore, where these features may not appeal in the domestic market.
Consider South Australian company FCT Flames, a world leader in creating flame effects for ceremonial and sporting events. Australia has a limited market for these kinds of products, so instead FCT has focused on exporting to markets around the world, most recently providing the cauldron at the South East Asian Games in Singapore. This is a clear example of a small business understanding, and profiting, from its appeal in certain markets.
Consider innovative distribution methods
Finding an innovative way to distribute a product or service can make a real difference to a small business’s success as an exporter. Small businesses should consider partnering with another business that understands the target market.
An overseas partner creates a new revenue stream and a new way to bring value to their existing customers, while the Australian small business gains a ready-made delivery channel run by people with direct experience of the market.
Digital technologies have also made it easier than ever before to reach out to overseas customers directly, either in collaboration with a partner or alone. Small businesses should explore innovative techniques for using digital technologies to reach their international customers.
Sydney-based digital marketing company Stackla has used both approaches to rapidly build a portfolio of more than 500 blue-chip clients around the world. Specialising in collating and analysing user-generated data across social media, Stackla provides its clients with customer insights they can use to create tailored marketing strategies.
By partnering with established providers like Hootsuite and Simpleview, and building relationships with global brands including Twitter and Facebook, Stackla has been able to win hundreds of new clients across Europe, North America and Asia Pacific in just four years.
Assess different ways to access finance
Small businesses tell us that access to finance is one of the barriers to export they regularly face. To overcome this, small businesses should seek alternative and innovative funding sources to help build their global presence.
For example, a growing number of start-ups are using crowdfunding – which is raising capital directly from the public, usually via websites and social media channels. It may sound unrealistic, but many companies have found funding this way in recent years.
One such example is Australian company, Flow Hive. In 2015, Flow Hive set a new crowdfunding record for businesses outside the US, attracting $4 million in less than a fortnight, and a total of more than $17 million.
This was despite the company only targeting a goal of $70,000. The response also saw their order book spike to more than 25,000 orders from 148 countries, leaving the company scrambling to increase production and distribution capacity to meet this demand.
According to Stuart Anderson, co-founder of the Brisbane-based business, “it was about attracting funding and marketing the product at the same time. Crowdfunding attracts all the people around the world that are interested in innovation.”
Becoming a successful exporter
There are many ways in which small businesses can drive growth through innovation. Whether it is by tailoring products and services for new markets, developing new distribution methods, or finding alternative sources of finance, Australia’s small businesses can become successful exporters through a commitment to innovation.
Andrew Watson is the Executive Director, Export Finance at Efic, a specialist financier that delivers simple and creative solutions for Australian companies – to enable them to win business, grow internationally and achieve export success.