By Roderick L. Abad | Contributor
HOMEGROWN small and medium enterprises (SMEs) engaged in international trade are more confident of their businesses than nontraders, and adoptive of today’s digital transformation, according to a recent study.
In the recent Future of Business survey, wherein the SME page owners on Facebook (FB) were asked about the current situation and their six-month outlook, the calculated score of their business-confidence level rose from 64 to 66 between the periods of November and December 2016.
Of the total 1,334 respondents—918 and 416 in two respective months—20 percent of them are involved in international trade, or 3 percent higher than the global average of 17 percent.
The majority of them are newly operating from one to three years (39 percent) or merely a year (28 percent).
They outnumbered the more established ones: 10 years, 17 percent; four to five years, 8 percent; and six years to a decade, 8 percent.
Corresponding to their ages, the study showed that start-ups really provide more job opportunities as they progress, as 39 percent hire only two to four workers; 27 percent, one personnel (either by the owner or anyone); 14 percent, five to nine staff members; 12 percent, 10 to 49 laborers; and 8 percent, over 50 employees.
Overall, 64 percent of the respondents are positive of the current state of their ventures and 81 percent expressed optimism on their business performance for the first half of this year.
Small-scale businesses playing in the global business field (71 percent) are more likely to increase jobs in the next six months than nontraders (64 percent).
The number of employees in the SME sector rose by 32 percent in the second half of last year, and is expected to double to 64 percent in the first half of 2017.
Shifting to digital era
SUCESSS—as in any kind and size of business—is not overnight. Even big enterprises and multinationals underwent a painstaking phase of expansion, so SMEs must be risk-takers enough to withstand any downfall.
Based on the results, the top 5 most commonly reported challenges for small businesses engaged in international trade are attracting customers (69 percent), maintaining profitability (60 percent), increasing revenue (53 percent), developing new products or innovation (46 percent) and securing financing for expansion (37 percent).
It is for these setbacks that small-time businesses leverage on technological advancements—more specifically, shifting to digitization—to help improve their operations.
The survey participants use online tools to show their products or services (79 percent), advertise to potential new customers (75 percent), communicate with clients or suppliers (75 percent), sell products or services (74 percent), provide information (66 percent) and manage internal business process (31 percent).
On the average, local SMEs use the web platforms for four out of six of these purposes, as per the research.
Women on top
IF before the world of business was dominated by men and women were mostly left at home, today, the latter also go out their way to their backyard. Behind any successful enterprise is also a woman, according to the Future of Business survey.
Gender-wise, the top management of the company-respondents is comprised “mainly” of female (41 percent) as compared to their male counterparts (32 percent). It is noted that the term “mainly” indicates that at least 65 percent of the management are either men or women.
Twenty-seven percent of the participants said there is a balance of gender mix among their talent pool.
Businesses ran by women are as confident about the current and near-term outlooks and report facing the same challenges as those managed by men.
Women are 14 percentage points more likely to communicate with customers or suppliers through online platforms and 12 percentage points more likely to tap the web channels to sell products and services.
Empowering SMEs
SMALL- and mid-sized enterprises represent over 90 percent of businesses in all economies and also constitute a majority of a country’s employment virtually worldwide.
More than 60 million of them use Facebook as a social-network platform to connect with their customers elsewhere in the world.
In the Philippines, wherein 99.6 percent of all registered companies are SMEs, mobile technology is their way to connect with people globally.
The high Internet penetration in the country makes it easy for them to link to the international market.
According to Facebook’s internal data in August 2016, more than 54 million people in the country are on FB, and 59 percent of them are connected to at least one business in a foreign nation.
Given these figures, Facebook, the Organisation for Economic Co-operation and Development and the World Bank teamed up to create the Future of Business survey as an online monthly study of small businesses to understand their sentiment, activities and challenges.
Their alliance shows the value of private-public partnership in producing timely information about businesses provides a pulse on the current and future economic environments in which businesses operate, and gives insights on ways to support the growth of enterprises.
“To help businesses succeed in the new mobile economy, we need to understand the current and future economic environments in which businesses operate. Businesses can help you understand the challenges they face and the opportunities that exist to help them grow,” said Clair Deevy, head of economic growth initiatives for Asia-Pacific at Facebook.
“This is a time to connect more, not less. And the more connected small businesses are to their own economy and to the international economy, the more success and growth they can enjoy. The more we can understand those connections and how they can fuel economic growth, the better,” she said.
Founded in 2004, Facebook is a for-profit corporation and online social-media and social-networking service based in California, whose mission is to provide the people with the power to share and make the world more open and connected.
The Mark Zuckerberg-led corporation is helping all businesses grow across borders and worldwide by introducing new resources and solutions.
One of the new solutions launched by Facebook for business owners is the Lookalike Audiences tool, whose feature enables them to reach customers in new markets abroad with similar profiles to their existing ones.
In addition, advertisers with portal conversion or mobile-app install objectives can utilize Facebook’s extended location-targeting capabilities by selecting a worldwide region or trade zone.
The social-networking service provider will then deliver ads to selected regions and then optimize delivery to the countries with the greatest return.
Webinars on global marketing with Facebook and a handbook on finding the right customers in new countries are part of new solutions to help enterprises maximize their international campaign strategy.
Image credits: Sentavio | Dreamstime.com