Exporting can mean big profits for a small business. If you are not exploring export markets, you may be missing out on a world of opportunity. Small Business and Exporting World trade is increasingly important to the strength of our economy and to the growth of U.S. companies. Exporting creates jobs and provides small firms with growth, new markets and additional profits.
Every billion earned in U.S. export dollars generates about 25,000 jobs. There has never been a better time for American businesses to begin exporting. As the world economy becomes more interdependent, the opportunities for small businesses become more attractive. Exporting is booming in the United States, and small businesses are beginning to realize that the world is their market.
A business does not have to be big to sell in the global marketplace. Experience shows that small businesses can and do export successfully. Finding your niche in the world market is similar to finding it in the U.S. market. Many of the same qualities that make small business owners successful in the United States apply to success in global markets.
The Advantages of Exporting Small business exporters can play a significant role in improving the U.S. balance of trade while protecting their competitiveness and improving their profits. Entering the overseas marketplace offers many benefits for small businesses, including:
- increased growth;
- increased profits;
- additional markets;
- extended product/service life cycles;
- increased numbers of customers;
- tax advantages;
- added product/service lines;
- improved competitiveness; and
- favorable publicity and recognition.
Exploring New Markets Thousands of small firms already compete in the global market. They account for 97 percent of companies involved in direct merchandise exporting, yet generate only about 30 percent of the dollar value of the nation's export sales. Small firms, then, represent the largest pool for potential growth in export sales.
Entering the overseas market does not have to be difficult. The same strategies applied in the U.S. market can be used to develop export markets. Selling abroad demands hard work, perseverance and a commitment of resources. It requires planning, market research and attention to detail. It may also involve changes, like new packaging and metric conversion.
The mystery can be taken out of exporting by considering some of the fundamental elements of the export process:
- Analyze the capabilities of your small business.
- Know the export potential of your product/service.
- Identify foreign markets that are right for you.
- Study market-entry strategies and export procedures.
- Learn how to process exports.
Where to Find Assistance
Once you have decided to expand into the international marketplace, you need to know how to get started. There are many resources that provide assistance for small and medium-sized businesses seeking to export. The SBA has published an Export Business Planner that is available on their website to help get you started. In addition there are other programs available.
Small business exporters may benefit from a variety of services provided by the SBA and the U.S. Department of Commerce. Types of services include:
- export counseling;
- workshops and training conferences;
- publications; and
- financial assistance.
SBA Assistance Export Working Capital Program (EWCP)
The EWCP provides short-term, transaction-specific financing. The SBA guarantees up to $750,000 or 90 percent of the loan amount, whichever is less. Exporters may use this program for pre-export financing of labor and materials, financing receivables generated from these sales, and/or standby letters of credit used as performance bonds or payment guarantees to foreign buyers.
The International Trade Loan Program (ITL)
The ITL helps small businesses that are engaged or are preparing to engage in international trade, as well as small businesses adversely affected by competition from imports. The SBA can guarantee up to $1.25 million, less the amount of SBA's guaranteed portion of other loans outstanding to the borrower under SBA's regular lending program.
U.S. Export Assistance Centers (USEAC)
The USEACs offer a full range of federal export programs and services under one roof. Clients are assisted by professionals from the SBA, the Department of Commerce, the Export-Import Bank of the United States, and other public and private organizations.
Service Corps of Retired Executives (SCORE)
SCORE is the largest network of volunteer business mentors, with 400 locations and 13,000 members throughout the country. The SCORE program offers individual counseling by retired executives, providing you with access to years of international business experience.
Small Business Development Centers
The SBDCs, operate in cooperation with local colleges and universities, offer in-depth business counseling and training.
Export Legal Assistance Network (ELAN)
Through ELAN, you can receive a free, one-time consultation from an attorney experienced in international trade law.
Export Access is an international market-research tool that delivers free market-data reports to your computer screen. Formerly known as SBAtlas, Export Access provides both product and country reports. The product report ranks the top 35 import and export markets for a particular product; the country report identifies the top 20 import and export products by country for the last five years. An on-screen graph allows for easy identification of trends. Export Access is easily reached via the Internet; it is on the Office of International Trade Home Page, which is found through the SBA Home Page. Export Access is also available at local SBA offices nationwide.
The U.S. Department of Commerce
The U.S. Department of Commerce offers a wide range of information on export potential, international markets, trade leads and contacts. It also conducts trade missions and catalog exhibitions, and assists firms participating abroad in trade shows.
International Trade Associations
Many of these associations and other private organizations offer a wide range of services. Most conduct regular meetings with qualified speakers and provide net- working opportunities with others involved in international trade.
Export Management and Export Trading Companies
These companies serve as export sales intermediaries and representatives for manufacturers. Services include locating foreign buyers, promoting products, making export sales, providing documentation and shipping products overseas.
Trade consultants can provide information on domestic and foreign trade regulations and overseas markets, and can assess overseas commercial and political risk. They often specialize in product lines and/or geographical areas. Some small law firms, accounting firms or specialized marketing firms also provide international-trade consulting services.
Make it your business to know what is available, where to get it and, most importantly, how to use it. Sources of information include:
- U.S. Small Business Administration
- SBA District Offices
- Small Business Development Centers (SBDCs)
- Service Corps of Retired Executives (SCORE)
- SBA OnLine (electronic bulletin board
- Business Information Centers (BICs)
The SBA has offices located throughout the United States. For the one nearest you, look under "U.S. Government" in your telephone directory, or call the SBA Answer Desk at (800) 827-5722. To access the agency's electronic public information services, you may access the SBA website.
You also may request a free copy of The Resource Directory for Small Business Management, a listing of for-sale publications and videotapes, from your local SBA office or the SBA Answer Desk.
- State economic development agencies
- Chambers of commerce
- Local colleges and universities
- Manufacturers and suppliers of small business products and services
- Small business or industry trade associations
Many small business owners do not realize the potential for foreign sales opportunities. These opportunities are well within reach. There are numerous federal programs designed to take the small business owner from purely domestic to a international concern. With just a little effort new markets can be found for the small business owner to increase and expand the business.