Less than 1% of the 26 million small firms in the U.S. are exporters, but the savvy entrepreneurs who do sell their goods to other countries have access to a business-boosting global marketplace.
With 96% of the world’s consumers living outside of the U.S. - representing two-thirds of the world’s purchasing power - what’s stopping you?
Larry Harding, president and CEO of High Street Partners, an Annapolis, Md.-based consultancy that helps small and medium-size firms navigate the world of exporting, says if you’ve got a market in the U.S. for your products or services, then there’s a bigger market for you outside U.S. borders.
He’s seen his clients expand into the United Kingdom, China and Japan, although the top trade areas for U.S. firms are with Canada and Mexico, he says. Brazil, Russia and India also offer “large and growing markets,” says Harding.
To get started, there’s a bevy of free resources available to entrepreneurs ready to explore the world of global trade and “it’s really easy,” according to Richard Ginsburg, a senior trade specialist with the Small Business Administration’s Office of International Trade.
He recommends that a business have a minimum of one year of successful business ownership behind it before taking the export plunge.
Ginsburg also advises an entrepreneur to make sure to create or modify a business plan to include the firm’s trade goals.
“It really depends on the stage of the business, its sophistication, knowledge or success of the business as they’re operating now as to how they can adapt their business plan to going global,” he says.
Don’t have a clue what to include in that new business plan? You’re not alone. Most small firms that export have less than 19 employees, according to Ginsburg, and they’re just trying to run and grow their business in these tough times. But don’t despair, help is on the way.
His office, in partnership with many other government agencies, offers free export seminars, workshops and counseling services across the nation for small firms.
For example, there’s an eight-city tour kicking off next month called Exports Live, beginning in New York and wrapping up in Seattle. Successful small and medium sized exporters will share their strategies and government resources will be on hand to outline their services.
“If you’re a small business and you’re not exporting within the next 18 months, you have to be concerned if you can stay in business based on foreign competition,” cautions Ginsburg. “Your customers could be importing and getting comparable quality at lower prices.”
Here’s a list of go-to resources that can help you put an international spin on your business plan, and more.
Small Business Development Centers – These centers are located in each U.S. state and territory. They offer advice on all things small business and are usually located at college campuses. “It’s a great place to get that new business plan started,” says Ginsburg.
U.S. Commercial Serviceis the trade promotion unit of the International Trade Administration. It has trade specialists in 107 cities and more than 80 countries to help a firm get started in exporting or to expand current export activities. This agency, along with the SBA, can help a firm obtain an export working capital loan. That’s a bank loan that’s 90% backed by the government. If you’re a picture framer, for example, who has gotten a $1 million order from a firm in Australia, you may need to fork out $400,000 for raw materials to fulfill that order. “Chances are a small business doesn’t have that kind of money, so this kind of loan is set up to front the money to fulfill that order.”
Small Business Administration’s Office of International Trade offers an Export Library with resources explaining how to get started along with a list of Export Finance Programs.
Export-Import Bank offers small business resources and can connect a small business with a trade adviser. It also helps explain financing options. For example, if you get a $1 million order for your picture frames in Japan, it will help you set up a plan to get paid in U.S. dollars and help mitigate your risk in the transaction.
The Commerce Department has 1,200 people in embassies around the globe. “You can call them up and ask them if they know of any artisans or businesses where they are located that might like your picture frames,” says Ginsburg. “Send them brochures and ask them where you might sell your frames. They are there to help you.” Commerce also offers a program that will vet the credibility of a buyer you’re considering doing business with, according to Ginsburg.
Minority Business Development Agency, a branch of the Commerce Department, is the only federal agency dedicated to advancing the establishment and growth of minority-owned firms in the U.S.
Export-U is a collaboration of public-private support that offers online export training to business professionals and students with a focus on rural firms.
States and municipalities also offer export assistance. Harding notes that Maryland’s Department of Business and Economic Development has offices in Israel and Shanghai.
Countries have offices in the U.S. to help ensure that American firms look to them as business partners. For example, Japan has the Japan External Trade Organization (JETRO) and the United Kingdom has U.K. Trade and Investment (UKTI).
The U.S. Chamber of Commerce, an advocacy group with members of all sizes, offers a trade portal.
The Federation of International Trade Associations provides links to trade tools, resources and markets around the world.
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