By Rieva Lesonsky
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 only American businesses that have global growth in mind. The study examined consumers and small businesses in 10 international markets: Australia, Brazil, Canada, Germany, Hong Kong, Ireland, New Zealand, Singapore, United Arab Emirates (UAE), and the United States.
The global move is powered, in part, by the adoption of new technologies by entrepreneurs, including digital payment solutions like cashless transactions. This is critical because the survey also reveals that 55% of consumers expect to increase their use of digital payments this year.
The Covid-19 pandemic halted the growth plans of many small businesses. But many entrepreneurs are back in gear. Jeni Mundy, Visa’s global head of merchant sales and acquiring, says they’re “seeing the small business mindset shift from survival mode to growth mode, as SMBs harness the power of digital payments to improve efficiencies, reach new audiences and simply thrive in today’s increasingly digital world.”
Mundy adds, “It used to be that only big businesses could scale to access customers across the country or around the world, but today’s small business owner can be virtually borderless.”
The latest small business mindset
The Global Back to Business Study shows how many SMBs are shifting their mindsets:
Ready to explore the world
Seventy-nine percent of the business owners surveyed say they’re 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’re already comfortable making global purchases. Some consumers were still hesitant about shopping globally but said card protection (50%), positive reviews (43%), and shipping assurances (34%) would increase their comfort level and encourage them to make global purchases.
Plan to go cashless
This is an aspiration for nearly all the small businesses surveyed—95% of entrepreneurs say they plan to be cashless “someday.” But some of the small companies are more motivated—35% acknowledge that accepting new forms of payment is an opportunity to reach new customers, and 51% plan to shift to “being cashless” in the next two years by accepting the use of mobile payment apps (55%), mobile wallets (50%), and contactless cards (36%).
More marketing
To reach new customers, the business owners surveyed 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 critical that you understand the current consumer mindset. Eighty-two percent of shoppers say they’ve already used 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 go cashless. In addition, 59% of consumers abandoned a shopping cart once they realized digital payments weren’t available.
Another factor driving customer sales is sustainability—68% of consumers say a company’s sustainability practices have at least “somewhat of an impact” on their decision to purchase from them. And 77% say they will pay more for sustainable products and services.
In addition to shopping globally, the consumers surveyed plan to invest their time and money locally. Nearly half (49%) say they will support their local economies and shop more at local businesses in the coming year, and 44% plan to make personal connections in their communities. If you own a brick-and-mortar retail store, consumers expect you to accept contactless cards (57%), mobile payment apps (49%), and mobile wallets (49%).
Also, digital payments encourage local customers to tip more often, with 77% of consumers saying they’ve noticed that more stores accept (and even encourage) using digital payments for tips, and 43% of those consumers felt more pressure to tip.
Small business and new technologies
In addition to adding digital payment solutions, 91% of the small businesses are “at least somewhat likely” to consider using automation and AI services like ChatGPT over the next 12 months “to help elevate their business against competitors.”
Adopting new tech solutions is a somewhat scary concept for most of the business owners surveyed. Only 33% say they’re “completely confident” in their abilities to evolve their businesses and “keep up with changes in technology and consumer preferences.” Far more (67%) say they’re less confident about tackling those tasks.
Many of the small businesses surveyed are also concerned about cyberattacks—67% say they don’t think their companies could fully recover from a fraud incident or cyberattack.
SMBs are “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 small businesses that engage in exporting “are more likely to increase their bottom lines, 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 “ebbs and flows” of the U.S. market.
About the Author
Rieva Lesonsky is CEO of GrowBiz Media and SmallBusinessCurrents.com and has been covering small businesses and entrepreneurship for over 30 years. Get more insights about business trends by signing up for her free Currents newsletter.
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