The U.S. is the world's largest exporting nation, but it has one of the lowest percentages of exporting companies. The Centers for International Trade Development report that fewer than 15% of all U.S. manufacturers export. SMEs are 97 percent of all exporting firms, however they are only 30 percent of the growth. There is huge potential here! Many small business owners and managers believe the myths about exporting - that its too difficult or too costly. But here are the facts....
Myth: I Am Too Small to Export
Only large firms with name recognition, abundant resources, and formal export departments can export successfully. False! The vast majority of exporting firms in most countries are small and medium-sized enterprises (SMEs). Many have fewer than 50 employees and annual sales in the $1-10 million range. It is true that large firms typically account for far more total exports (over 85 percent in the U.S.), but SMEs dominate the world’s exporting population. In the past few years, micro-sized companies (20 employees or less) have made up 67 percent of the SME exporters.
Myth: I Cannot Afford to Export
I don't have the money for hiring new employees, for marketing abroad, or expanding production for new business. Not true! There are low-cost ways to market and promote abroad, handle new export orders, and finance receivables. This does not require hiring new staff or setting up an export department. At little or no cost, for example, you can receive product and country market research, worldwide market exposure, generate trade leads, and find qualified overseas distributors through the U.S. and Foreign Commercial Service (USFCS). If you need start-up or working capital, loan guarantees and other finance programs are available from such organizations as the U.S. Small Business Administration, the U.S. Export Import Bank (ExIm), through federal grants, and other sources of private funding. Information on the processes and programs can be found at www.export.gov/marketresearch.html, and http://www.export.gov/expfinnag.html.
Myth: I Cannot Compete With Large Overseas Companies
My products are unknown and my prices are too high for foreign markets. Not necessarily. The global marketplace is large, with varying needs and interests. If your product is bought domestically, it might well be wanted somewhere else in the world. Conversely, you may find that products that were not so successful at home, may be in high demand elsewhere. Price is important, but it is not the only selling point. Other competitive factors play a large role including quality, service, and consumer taste - these may override price. Furthermore, your prices may not be relatively high in countries with a strong currency, as in the European Union.
Myth: Exporting is Too Risky
I might not get paid. I might get taken. I might break a law I didn't know about. Not likely! Selling anywhere has risks, but they can be reduced with reasonable precautions. To assure you get paid, use Letters of Credit (L/Cs). If customers want credit, use low-cost export credit insurance programs, available through ExIm. Market research, counseling and advocacy, and shipping requirements can all be found on www.export.gov. Furthermore, your local U.S. Export Assistance Center (USEAC) and USFCS offices abroad can give you detailed information on country requirements and risk mitigation tips. A complete listing of these offices can be found at http://www.buyusa.gov.
Myth: Exporting is Too Complicated
Exporting is too complicated; I won’t understand the laws and documentation requirements. Wrong! You don't need to be an expert to export. There is an abundance of resources to help you every step of the way. Your local USEAC can provide you with personalized assistance, set up international buyers for you, help you obtain financing, and explain relevant rules and regulations. With the increasing number of Free Trade Agreements (FTA) international trade has becoming easier and therefore, more attractive. For example, many first-time exporters find that tapping into the Canadian and Mexican markets is simpler than first thought because of the North American Free Trade Agreement (NAFTA) and because of their close proximity. Documentation is limited and the process is streamlined. The most important thing to remember is that your U.S. Government provides an ample amount of resources to guide you; all your company needs to do is to tap into them. Contacting your local USEAC is the first step for your successful exporting business.