According to the U.S. Small Business administration, “Two thirds of the world’s purchasing power is in foreign countries.” On average, U.S. exporters grow faster than non-exporting businesses. Exporting can help small businesses diversify and become less reliant on the U.S. economy or income from any single region. However, there are some risks involved like sudden increases in tariffs during a trade war or countries copying your product to sell locally.
What is exporting?
Exports are goods and services produced in one country and then sold to a buyer in another country. Exporting is an easy way to access the buying power of international markets. Exporting is an excellent way to create a sustainable business model.
When should I consider exporting?
Looking to grow your small business and develop a diverse source of income? Exporting may be a good choice. U.S. made products are typically of higher quality than products made elsewhere. If your product is in high demand, the sooner you begin exporting the better. Consider the following:
- The U.S. exports nearly two-trillion dollars’ worth of goods and services annually.
- Ninety-five percent of the world’s consumers are located outside the U.S.
- With today’s technology, access to exporting can be easy. E-commerce through the internet, improvements in logistics, free trade agreements with twenty countries and a slew of government export assistance makes exporting achievable for small businesses.
- Exporting can be profitable. On average companies that export make more than their non-exporting competitors. Sales grow faster, and companies that export tend to see less economic fluctuations or seasonal selling as their business cycles smooth out.
- Companies that export become more valuable should selling the business be a consideration.
- Companies that export are more likely to stay in business.
Which businesses are best for exporting?
Some of the top exported items are agriculture, clothing and textiles, beauty products, meat and seafood, machinery, chemical products, and petroleum products. It has been proven time and again, that US exports are popular world-wide. If your product has even a moderate interest in the US, chances are it will sell world-wide as well.
What are examples of exports?
Ben and Shelby Stilltender make a superb sour mash bourbon. With a recipe passed down since the days when Ben’s grandfather first began making moonshine, the liquor is prized by fine restaurants and retailers across the country. A few years back, a diplomat from Spain discovered the drink during a visit to the U.S. Upon his return, he contacted the Stilltenders and arranged to buy a case of bourbon to be shipped to his home in Barcelona. Never having done this before, Ben and Shelby contacted an export management company or EMC to take care of all necessary paperwork and arrange shipping. Additionally, the EMC sourced out a distributor in Spain and the Stilltender’s one-time order turned into full time exporting. Seeing their profits soar, they began exporting the bourbon to eight different countries.
Other examples of exporting are wheat farmed in the U.S. and then sold to China. Jet engines produced by the Boeing company and sold to buyers around the world.
How do I export my business’ products?
The Small Business Association (SBA) can help you get started with exporting products and services. They can also offer loans and working capital if necessary. Paris SBDC is also here to help, check out our resources section on exporting for the following:
- Benefits of exporting
- Beginner’s guide to exporting
- Get counseling and training
- Find international buyers
- Export finance programs
- Additional trade resources
Export Management Companies (EMC) are a resource as well. They typically charge a fee or collect a percentage of the exported item.
The government has a list of programs designed to bridge new markets and help small businesses find international buyers.
Before choosing to export a product or service, read through the government’s export regulations at the US Export Regulations Website. This may help you determine if you have a suitable item for export as well as offer guidance on how best to start exporting. There you will also find information on licensing, tariffs and more.
Another resource to help you get started is the International Trade Administration.
For additional information or resources on how to export goods in your small business, or on how to grow your exporting business, please contact us at the Small Business Development Center – SBDC – Serving Paris area: Lamar, Hunt, Hopkins, Delta, and Red River counties.