Advances in technology, logistics and transportation have empowered smaller companies with fewer resources to compete and succeed in arenas once reserved for the largest organizations. Today, small businesses that used to target neighborhood customers are seeking a national audience, and many are going global.
In fact, given the reach of e-commerce and the vast array of shipping options available, the real question today is not why smaller companies, including start-ups, should consider having an international presence, but instead why more of them do not.
According to the Department of Commerce’s International Trade Administration, less than one percent of the approximately 30 million companies based in the U.S. are involved in exporting. Of course, many of these exporters are small or medium-sized enterprises (SMEs) – up to 98 percent of them – but there are still millions of SMEs that have yet to pursue international customers. The reason? Getting a global strategy in place and making it work takes time and financial resources – valuable commodities, especially for today’s small business owners and managers. So what can your organization do to take advantage of a worldwide base of potential customers?
Here are some key considerations to get your exporting strategy in gear:
Follow the Money
Grants, loans and technical assistance through state and federal government agencies are available, but business owners must do the research to find them. For instance, in 2014 the Governor of New York announced the creation of Global NY, a series of initiatives to promote exporting, including a $35 million Global NY Development Fund to assist companies in developing capacity, including marketing plans, product adaptation, website translation and market certification. $25 million will be used to leverage additional funds from private lenders as part of an overall small business lending effort. Parts of the New York program are still in development, and in the beginning of 2015 export assistance was heralded as a major component of the Governor’s economic agenda for the year.
New York is, of course, not the only state to offer financial and technical help to small businesses. The U.S. Small Business Administration’s State Trade and Export Promotion (STEP) Pilot Initiative provides matching funds to states in order to assist small businesses as they enter international markets. Since Fiscal Year 2011, millions of dollars in grants have been awarded; most recently, in 2014, grants were provided through 24 states, totaling approximately $8 million.
Export financing is also available on the federal level, and the National Export Initiative (NEI) offers a direct platform for companies to research international trade strategies and locate financing opportunities. Linked with the NEI, the Office of the U.S. Trade Representative also offers valuable resources.
Talk to the Export Experts
While there is a great deal of information to be accessed online, companies looking to launch internationally should take advantage of the U.S. Commercial Service’s network of export assistance centers, located throughout the country. They can help guide strategies, including the targeting of appropriate international markets, obtaining financing, and participation in trade shows and international visits.
Understand the Logistics
Financing the transition to new regions and understanding the risks and benefits of specific international markets and their rules is just the start of the global process. Moving products efficiently from production facilities and distributors across borders is key to building customer satisfaction and engagement on an international level. Once a company launches in a particular market, if shipments are delayed, lost, or damaged, goodwill with customers, vendors and suppliers could be jeopardized.
Small business owners and managers must talk to potential shipping partners, and understand the tools and process involved in international shipping – along with the unique requirements imposed by different countries. An effective logistics partner should be able to guide not just delivery of products, but should be able to offer deep insight into the specific shipping requirements set by different countries. For instance, Algeria bans the import of used construction equipment and over 400 different medicines, while Nigeria does not allow plastic flowers to be brought into their borders, and Argentina does not allow maps in GPS systems.
Finally, an effective logistics partner should be capable of assisting with contingency planning, by offering direct support and guidance. Should a financial or natural disaster affect your ability to deliver goods to customers overseas, you must have a plan in place to recover quickly.
Become an Advocate
The development of new export financing programs like the Global NY Initiative starts with advocacy. Small business leaders should connect with elected officials in their states and make the case for prioritizing export assistance.
Small businesses today are more connected than ever before – connected to their customers, employees, suppliers, vendors, and even their competition. In this technology-driven environment, finding new global customers is not only possible for most small businesses – it is increasingly becoming an absolutely essential ingredient for success. Don’t let this growth opportunity pass your business by; get your exporting strategy in gear today.