The landscape in which businesses operate has shifted significantly in recent years - growth remains slow across much of the global economy and spiralling inflation has increased the cost of doing business.
As members of Kreston Global, we’re able to gain valuable insights into businesses from a wide range of sectors all around the world, allowing us to understand their challenges and provide important guidance on how to adapt and grow.
The 2024 Kreston ‘Interpreneur’ (International Entrepreneur) Report sheds light on the realities of going global as a business, investigating what it means to find success as an interpreneur, where the biggest barriers lie when expanding abroad, and what strategies SMEs are using to navigate the pressures of international entrepreneurship.
Despite the turbulent business landscape, the report shows that interpreneurial drive remains strong. 87% of respondents expect an increase in the number of businesses expanding overseas in the next 12 months with the most popular prospective destinations being Western Europe (52%) and North America (48%).
What’s more, more than half (52%) of respondents said the primary motivation for their business to expand internationally was to secure market growth opportunities. This was followed by a desire to gain a competitive advantage by gaining a foothold in new regions before competitors.
Almost all respondents (96%) believe that going global has benefitted their business, with increased sales/revenue and greater profitability being cited as the two biggest benefits. With this in mind, it’s no surprise that so many businesses see an opportunity to grow by expanding overseas.
To do this, almost half (47%) said that their business is likely to consider using or has used, capital from private investors to grow internationally, and 43% reported using or considering venture capital or private equity investment.
However, as well as being clear-sighted about the opportunities, business owners are also conscious of the challenges and risks.
Adapting logistics processes and dealing with supply chain issues was the biggest hurdle (for 41%) when undertaking an international move, followed by finding the right local partners (39%). A similar proportion (38%) felt that an economic slowdown or recession poses a disruptive or significant risk.
As businesses expand globally, they must consider their position when it comes to common business trends such as Environmental, Social and Governance (ESG) and making use of advances in technology, like artificial intelligence (AI).
The report reveals that ESG issues are front of mind as businesses look to increase their global footprint - 93% said they do or would consider ESG practices to some extent when considering which countries or regions to expand into.
Additionally, 90% of respondents said they feel prepared to harness the benefits of AI in their global business operations in the next two years, and only 3% said they felt unprepared.
When expanding a business globally, staying abreast of complex changes to tax rules and regulations is something that all interpreneurs need to do.
It’s promising to see that four in ten respondents (40%) said they are extremely confident that they have a deep understanding of the global international tax rules that govern multinational businesses - and a further 53% say they are confident that they understand these rules.
Mark Taylor, Head of International, Tax Director at Duncan & Toplis, said: “The Kreston Interpreneur Report 2024 provides useful and important insights into the considerations for SME business leaders who are looking to expand overseas.
“Many are aware of the opportunities and risks involved with global expansion and have a strong drive to succeed. It’s encouraging to see that there seems to be a solid understanding of global tax rules worldwide, too.
“However, there are significant tax changes coming into force in the next few years, which interpreneurs will need to keep a close eye on in order to remain compliant.”
To find out more and to read the full report, please click here.
