Covid-19 Impact on Business Expansion: Tips for SMEs

Despite our expectations of the global economic cataclysm, we have seen a good deal of business expansion during the COVID-19 pandemic – how can we explain this?

The pandemic has revealed that extremely long global supply chains can fail retailers in the case of natural disasters, which has contributed to a rise in local manufacturing sector growth. In the US, many companies and suppliers struggled to meet increasing demand and responded by reopening and expanding a manufacturing sector lagging until then. The same can be said for Europe. Despite Brexit, manufacturing plants have been popping back into being, with the biggest bottlenecks occurring as a result of logistical issues and shortages in products and labor, as the continent begins to re-establish itself in sectors largely defunct for decades. These trends represent a re-organizing of the global supply chain system, where zones that typically export manufacturing are retaking ground in the sector. It makes sense that businesses are becoming more localized with borders closed, supply chains drying up, and employees working from how, but many businesses are actually expanding internationally.

Smart businesses have adapted remarkably quickly. So what are the new factors that COVID-19 has introduced into business expansion?

Trending Movement Toward Online Businesses

While the trend toward online-only businesses has been growing over the past decade, the restrictions of COVID-19 shot this movement into the stratosphere. Now, instead of a brick-and-mortar establishment, all you really need to hang out your shingle is a website. The ramification is that we no longer need to set up shop in another country if we’re looking to expand our business that way. That means no location scouting, no rental, no office space, no furniture: the list is extensive. We no longer need personnel to support expansion in the same way.

Work From Anywhere

Companies realize employees’ work shouldn’t be limited by their specific location so that a home office employee in Toronto can pick up slack at a satellite office in Brazil and vice versa. Working from home has further accelerated this movement as multiple studies have demonstrated that employees working from home are better able to manage distractions and interruptions, focus for extended periods, work and communicate more confidently, and think more creatively. Technology has also risen to meet this new paradigm with apps like Zoom, Teams, and Slack, to name a few. This has all meant that international businesses can now operate in foreign markets without all of the issues that come along with a foreign market presence.

Permanent Establishment Considerations

One of the most complicated learning curves for moving into new countries is understanding the different legal tax and compliance regulations. This complexity presents a risk as damages to your reputation, fines, missed deadlines, difficulty financing, and even jail time are all on the table for any transgressions. Having an online-only as opposed to a permanent brick and mortar establishment eliminates this risk.

A Pool of Talented Candidates Multiplies

With remote work, suddenly, your talent pool is expanded to include all qualified candidates worldwide. Recruiters are no longer bound by geographical borders and have the opportunity to scout the most coveted talent who are at the top of their fields globally.

Business expansion can happen so much faster than it once did since it's easier to move into a new market, recruit globally, skirt several local compliance laws and skip local office set up. The one thing you need to bring all of these elements together is an ERP system that will track your productivity and keep your satellite locations connected to one another and to the main office. At be one solutions, we can provide you with an SAP ERP, and walk in step with you through your expansion and SAP global rollout project, and the best part is that we can do it all remotely, too, so we will be with you even in the face of a pandemic.