Roadblocks for a SME in pursuing International Business

Before delving deeper into the roadblocks of International Business, we should understand ‘what’ and ‘why’ of International Business. International Business is simply the business activities involving the cross border transactions of goods, services, resources between two or more nations. Companies enter into International business because of saturation in home market, lucrative opportunity in foreign market and to increase customer base.

SMEs always find it difficult to pursue International Business because of the following reason: 

1. Lack of insights in strategy formulation: Many SMEs lack in full-fledged International Business department and hence lack of competent resources. They also shy from hiring a good consultancy. Hence, they end-up choosing a wrong portfolio of countries. 
2. Lack of competent Human Resource: International Business requires special attention, persistent focus and global mindset. Anyone and everyone in the organization are not ready for these challenges. Specialized and competent human resource in International Business is not easily available. 
3. Lack of focus and commitment from Higher Management: Top Management of all the SMEs are very much fascinated by the International business opportunities. They also initially take up this activity with full enthusiasm but as time passes their focus and commitment shifts and International Business takes backseat.  
4. Lack of financial resources: International Business requires huge investment at its establishment phase. It requires lot of face to face interaction and hence travel, stay and other expenses at foreign location. All these expenses may or may not generate returns in future. Also, opening offices at foreign location add to the expenses. 
5. Lack of Patience: It takes lot of patience to establish International Business and return in monetary terms take a considerable amount of time. Initial one or two hiccups de-motivate the Top Management of many SMEs. Break-even in International Business requires patience. 
6. Lack of Infrastructure: As it requires huge investment in establishing infrastructure in International Business may be without immediate returns demotivates the SMEs from pursuing these activities. From their home location, they incessantly search for establishing the channel partners in the foreign country but it does not provide a desired result as whatever the advocates of Internet say, it still cannot replace the importance of Physical presence and Human touch.

As foreign countries are culturally very different from home country, business through channels is the key to success. But establishing channels also require substantial investment which may generate revenue stream for longer period of time but right strategy and patience is what it takes to succeed in International Business.