By: Nand Arora

Do you think you are too small to grow outside our borders? Think again!

I often hear from my students that we do not export anything or that we import everything from China. Many small businesses seem to believe that they can’t grow outside our borders because they are too small or that they can’t compete with China, Mexico, and other low-cost countries where labor is cheap and plentiful. I would like to argue otherwise. 

U.S. exports of goods and services in 2012 reached a record annual total of nearly $2.2 trillion according to the export import bank of the United States. That number is 39.1 percent above the level of exports in 2009. Among the major export markets, the countries with the largest annualized increase in U.S. goods purchases, when compared to 2009, occurred in Panama (31.2%), Russia (24.7%), United Arab Emirates (24.4%), Chile (23.4%), Peru (23.4%), Venezuela (21.1%), Argentina (21.1%), South Africa (20.6%), Hong Kong (20.6%), and Columbia (20.3%).

Although the United States exported nearly $2.2 trillion in goods and services last year, it is still isolated. Fewer than 1% of America’s over 30 million companies export. That is a significantly smaller percentage than those of other developed countries. What is interesting is that small companies with fewer than 20 employees represent 72% of the exporters and 14.2% of the value of goods exported.

“The social responsibility of business is to increase its profits,” wrote noble laureate Milton Friedman. All other social responsibility programs are simply “hypocritical window-dressing,” he wrote. Right now is the best time to fulfill that social responsibility by expanding internationally and to make money because 95% of the world’s customers and the world’s fastest-growing markets are outside our borders.

During his 2010 State of the Union address, the President announced the National Export Initiative, a program aimed at doubling American exports in five years – an increase that will support 2 million American jobs. Some of the biggest factors limiting a firm’s decisions to export were high upfront costs of establishing a foothold in a new market, and the ability of the customers in that market to finance the purchase of their products, said the President.

As part of the initiative, the Obama administration increased the budget of the Commerce Department’s International Trade Administration by 20% to help advocate for American businesses abroad and called on the Export-Import Bank of the United States — which provides export financing when private banks cannot or will not — to increase financing for small and medium-size businesses to $6 billion.

It is easier than you think.

A good starting point for anyone interested in starting or growing a business internationally is, http://www.exim.gov, the website of the Export-Import Bank of the United States for small businesses. It has a wealth of information available on its website at no cost, including webinars and seminars.

Next, choose a market. You can’t do a thing until you know where you are going, and until you find customers. SBDC Global is an online trading platform that links small business to international trade opportunities. A free registration is required to post trade leads and to receive trade information and training. Finally, information on the top ten hot export markets is listed on Entrepreneur Magazine’s website: http://www.entrepreneur.com/magazine/index.html.

Now, you have to do the rest.

 

Sources: 

APA: U.S. Exports Reach $184.3 Billion in March | Reuters. (n.d.). Retrieved from http://www.reuters.com/article/2013/05/02/ex-imbank-bea-stats-idUSnPNDC06871+1e0+PRN20130502

APA: Milton Friedman The Social Responsibility Of Business Is To … (n.d.). Retrieved from http://www.studymode.com/subjects/milton-friedman-the-social-responsibility-of-business-is-to-increase-its-profits-page1.html

APA: Remarks by the President at the Export-Import Bank’s Annual … (n.d.). Retrieved from http://www.whitehouse.gov/the-press-office/remarks-president-export-import-banks-annual-conference

APA: Industry Today – Standards Boost Business: Call to Action for … (n.d.). Retrieved from http://www.industrytoday.com/article_view.asp?ArticleID=F372

APA: How to Increase Your Export Sales – Business Exchange. (n.d.). Retrieved from http://bx.businessweek.com/international-business-education/how-to-increase-your-export-sales/3424801623228542040-9790b89e46b0d085a71bfaca3771ad6f/