When brainstorming how to grow your business in 2020, think big. Expand your plans beyond just your local community and consider selling goods or services internationally.
According to a study by the Institute for International Economics, U.S. companies that export not only grow faster, but are also 8.5 percent less likely to go out of business than non-exporting companies. What’s more, growth opportunities abound for exporters, since nearly 96 percent of consumers live outside the U.S., and two-thirds of the world’s purchasing power is in foreign countries. Ultimately, exporting can help small businesses – who make up 98 percent of all exporters – to increase profits, reduce market dependence and stabilize seasonal sales.
The 2019 U.S. Small Business Administration (SBA) Exporter of the Year, EarthQuaker Devices, was able to expand from a home office to a renovated two-story, 15,000-square-foot building using their increased earnings from exporting. You too can leverage international trade opportunities to advance your business’s goals and flourish as an exporter.
How to Trade Up and Become an Exporter
Are you ready to take the plunge and expand your business abroad? Consider taking the following steps:
- Learn about the market. Use export statistics from the U.S. Census Bureau to pinpoint large international markets where growth has been consistently strong over the past several years. Don’t forget to also research up-and-coming markets (where there may be fewer competitors). And U.S. Export Assistance Centers (USEACs) can help you with this process if you’re unsure where to start or don’t know if your products are a good fit for these markets.
- Connect with buyers or distributors. Another key step in forming your exporting strategy is deciding whether direct or indirect selling makes most the sense for your business. Indirect selling means selling your products through an intermediary. Hiring export management companies and export trading companies can often be the easiest way for small businesses to break into a new market, since these companies already have international contacts. Direct selling, on the other hand, means that you are responsible for finding international buyers for your products, whether through advertisements, trade shows or an e-commerce presence.
- Secure financing. U.S. banks often consider lending to exporters risky, but alternate funding sources exist. For instance, the SBA has programs that provide lenders with up to a 90 percent guaranty on export loans. Here is a list of participating lenders. Another option is Export Express lenders, which can directly underwrite a loan without getting prior approval from the SBA, speeding up access to capital. Check out this full list of financing options for exporters.
Resources for Prospective Exporters
If your state participates in the federal State Trade Expansion Program (STEP), then you can reach out to your local STEP office for help entering the international marketplace. Additionally, the SBA’s Office of International Trade offers a toll-free trade hotline at 1-855-722-4877. You can also receive assistance at U.S. Export Assistance Centers or Small Business Development Centers. Start exploring the many benefits of exporting with the SBA today.
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