International trade is becoming less of a stretch and more of a requirement for SMEs in the U.S., and technology makes global B2B trade easier than ever. Still, market conditions impacted by economic fluctuations and politics can throw wrenches in small businesses’ international trade plans.
Luckily, businesses are feeling more confident about the future of these initiatives. New research that came out Tuesday (Feb. 16) from Western Union Business Solutions found that nearly half (45.7 percent) of businesses anticipate that global trade conditions will improve the year.
It’s far from across-the-board optimism, but researchers also found that that figure increases along with company size. Larger SMEs have a more positive outlook on international trade, with 68 percent of businesses with between $20 million and $100 million in annual revenue expecting trade conditions to improve in 2016.
Meanwhile, only 43 percent of mid-sized SMEs said the same and just 38.1 percent of micro-SMEs.
Regardless of outlook, it is clear that global B2B trade is on the minds of these business owners and so is the strategy for how to deal with some of the add-on impacts of this trend, like the increasing value of the U.S. dollar.
Reports said 42 percent of larger SMEs have already deployed a strategy to leverage the strength of their local currency, and an additional 47 percent said they plan to.
However, just 4.3 percent of mid-sized SMEs said they have set plans to do the same. Nearly all SMEs surveyed said the increasing strength of the U.S. dollar has impacted their business.
“Our survey found that while small businesses are reporting a strong tailwind from falling energy costs and lower business costs, almost all are also contending with the effects of a strong dollar,” said Western Union Business Solutions North American Managing Director Scott Smith in a statement.
“These currency conditions are a fundamental aspect of business planning to manage exposures to both large economies, like China and India, or smaller ones, such as Greece,” he continued. “Small businesses’ sensitivity to commodity pricing highlights the delicate nature of this segment’s profitability, which can be offset by payment strategies, such as currency hedging.”