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Does Exporting Make Sense for Your Business?

The impact that small businesses have on United States exporting is often underestimated, when it is considered at all. Did you know that 98 percent of all exporters are small businesses?  And, small businesses account for 30 percent of the total value of goods exported?  Plus, the number of small business exporters is growing. A 2013 study  by the Small Business Exporters Association (SBEA) found a “notable increase in the number of small-business owners who report they export their goods and/or services” over the number who did so in 2010.

Why the interest in exporting? The biggest reason is the tremendous potential for new customers. According to the Small Business Administration (SBA), 95 percent of the world’s consumers live outside the United States and those non-U.S. consumers account for 66 percent of the world’s purchasing power. Although Canada remains the top destination country, China, India, Mexico and Brazil are also significant markets for U.S. exports, providing markets for a wide variety of goods and services.  

While the lure of exporting is powerful, it is not an activity that a small business can undertake without serious preparation and commitment.  In the SBEA study, nearly half of the small business exporters surveyed spent months, and over eight percent of their annual operating revenue, simply preparing to export.  Yet, despite the time and expense of launching an export business, the resulting access to the vast international market can drive significant growth. Between 2005 and 2009—years that included the infamous financial collapse—small and midsize exporting businesses had revenue growth of 37 percent.  In contrast, the total revenue of non-exporting  businesses declined by seven percent during the same period, according a report issued by the U.S. International Trade Commission.

Given the potential upside, it is worth exploring whether exporting makes sense for your business. Here are five avenues that you can take to help with the process of exploration, preparation and implementation.

  • Get an overview. The SBA is offering a free, one-hour webinar “Take Your Small Business Global!”  on August 13, 2014 designed for small businesses that are interested in beginning or expanding export activities of goods and services overseas. This is an excellent, low-risk way to determine whether exporting fits into your business plans.
  • Assess your readiness.  BusinessUSA offers an online Export Readiness questionnaire to help you gauge your current level of knowledge and commitment. Once you complete the questionnaire, a list of resources is provided based upon the results of the assessment.
  • Build your plan. SBA’s Export Business Planner is a free, downloadable tool that can be completed as you develop your exporting plan.
  • Learn about financing options. The SBA has three main export loan programs: SBA Export Express, which can provide financing up to $500,000; Export Working Capital, which can provide advance up to $5 million; and the International Trade Loan Program, which provides a range of financing options.
  • Obtain expert guidance.  U.S. Exporting Assistance Centers (USEACs) are located throughout the country. These offices are staffed by professionals from the SBA, the Department of Commerce, the Export-Import Bank and other organizations and offer free advice and guidance.  

Exporting has proven to be a means to revenue growth for many small businesses.  By taking the time to explore some of the options presented above, you will be able to determine if it is a path that you want to take as your business grows and expands.

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