Globalization is something that all of us hear a lot of these days. We continuously hear about how the world is becoming more and more interconnected and the positive/negative effects of that. The actions that you take in your local part of the world no longer just stop there – those actions are related to other things that are happening on the other side of the world.
And this is even more true when it comes to small businesses. These small and local companies that used to be confined to one geographic area now have a larger role to play in the global economy, thanks to globalization. This has provided many challenges to small business owners as to how they can continue to grow and thrive in such a competitive marketplace. Keep reading down below to learn some more about how exactly globalization impacts small businesses around the world.
1. Access to The Global Market
One of the biggest impacts that globalization has had on small businesses is the fact that every business with an Internet connection now has access to the global market. It used to be that if you didn’t have this connection, then there was no way you could access buyers and suppliers halfway across the world. Now, every single consumer can reach into their pocket, pull out their smartphone, and access the products or services you are trying to sell. This has the potential to massively increase the revenue of any small business beyond what they were able to produce prior to globalization taking effect.
2. Remote Staffing
Another impact that globalization has had is the availability of remote staff on other parts of the world. Where it was once only an option for small businesses to have physical staff members, they can now have employees working in an office on the other side of the world. Or they can have an entire digital marketing agency conducting their marketing strategy miles away from the headquarters. This has given small businesses the flexibility they need to cut costs and raise revenue.
3. Competition from Around the World
Next up on the list, we have competition. As globalization increases, more and more businesses enter the market. Thanks to that accessibility we mentioned earlier, this means that there’s a ton more competition for small businesses around the world. For the product, you are trying to sell, there is likely going to be ten other businesses that are selling similar products. That means that businesses now need to improve the quality of their products and lower prices enough to stay competitive. Or else they risk getting kicked out of the market thanks to this high global competition. Make sure to check out the foreign exchange headlines and other financial news outlets to keep ahead of this competition.
4. A Business Equalizer
Thanks to globalization, everything has become a bit more equal. The Internet gives every single business access to marketing tools, business information, and everything else that can make them as competitive as larger and more established companies. That’s part of the reason why Uber and other tech giants rose in popularity so fast. The business world is a lot more equal now, letting small businesses gain popularity where they wouldn’t have been able to before.
5. Increase in Tourism & Travel Companies
And lastly, a huge effect on small businesses has been the explosion of the travel & tourism industry. More and more people are traveling the world, thanks to access to cheap travel. This means that if your business is related at all to the travel sector, then you are likely to be seeing a big boost in revenue thanks to these tourists. This also means that more businesses are entering this sector, increasing competition.
And there you have it! These are the big ways that globalization is affecting small businesses around the world. Sure, this might seem like some big developments, but if you prepare your business, then you are much more likely to weather the storm and stay above the tide.