Exporting: A Game Changing Strategy to Boost Your Business
You’ve built a thriving business selling your products or services here in the USA. Kudos to your entrepreneurial success, but you may not realize how many other potential customers you’re missing. Did you know that 95 percent of the world’s consumers live outside the United States? It’s time to grow your business by reaching the global market.
That’s where exporting comes into play. It can be the strategic growth opportunity that takes your business — no matter how small — to the next level. Not sure where to start? While the prospect of selling internationally may sound daunting, you don’t need to do it alone. There are government resources available to help you at every step along the way and give you the confidence you need to compete for global sales.
It’s like finding a toolbox filled with tools you didn’t know you needed.
Jack Huang, President of Calway Foods in Santa Clara, California, encourages other small businesses to look at international trade as a way to elevate your business and increase your sales, using the tools available at the local, state, and federal level.
Opportunity is everywhere, he explains: “Trading is not rocket science; this is something that you can easily learn. … You just need to spend a few weeks, and you can be an expert.”
Archana Sharma, CEO and Chief Storyteller for AKAS Textiles puts it this way: “Any small business could actually expand and double, triple, quadruple their revenue if they look at exports.”
That’s exactly what happened for her company, which tripled its revenues with exporting. But how can you implement this strategy? Here are answers to common questions about how to get started.
Getting paid: How do you protect your business from nonpayment by a customer in another country?
Export credit insurance is an insurance policy, like the policy you already have on your house or car. In this case, the policy provides coverage on the accounts receivable that are generated from your international sales. Are you interested in exporting, but worried about buyers not paying on time, or at all? Or, you may be concerned about winning sales, or about the political risks involved with certain countries. Those are exactly the issues export credit insurance is designed to address.
Extending credit terms: How can you offer international customers credit terms to grow your business?
As you expand globally, you realize that requiring customers to pay in cash may be costing your business, so you need a way to extend credit terms to your buyers. Export credit insurance empowers you to meet, or beat, your competitors by giving you the ability to offer attractive credit terms. Your business can use open account credit terms to win new customers and increase sales to existing buyers. Another benefit to insuring foreign receivables is that lenders will often accept them as collateral, expanding your borrowing base and improving cash flow.
Working capital: How can you access cash up front to grow your business or make your products?
A working capital loan guarantee offers exactly what it sounds like — a guarantee to lenders so they will be more willing to lend money to purchase or manufacture goods and services destined for export. The collateral for the loan is the export-related inventory itself (including work in progress) as well as the foreign accounts receivable generated from the sale of the products.
Service providers: Can you take advantage of these opportunities if you provide an essential service rather than manufacture a physical product?
Many people think of exporting as selling hard goods, or physical products, worldwide. But U.S. services — including finance, education, software, entertainment, engineering, architecture, legal, and many others — are in high demand worldwide. The service sector in the United States is driven primarily by small and medium-size businesses, and it thrives in an entrepreneurial environment. If your small business provides excellent service and is looking to grow, the world is waiting for you!
Hear From Your Peers: Small Businesses Who’ve Taken Their Businesses Global
When Dr. Wei-Shin Lai had trouble falling asleep at night as a family physician, she invented the product she needed — and launched Acoustic Sheep, growing the small business from a kitchen-table operation into a successful company that has increased sales every year. As the company grew, it began selling its products internationally, but experienced difficulty when customers defaulted on payments. Read more in this story featured in Entrepreneur magazine about how she overcame those obstacles and now offers products in approximately 175 countries.
When Angie Yu learned that the exploding population of Asian carp was endangering the Mississippi River ecosystem, she realized demand existed in countries where the fish is a delicacy and recognized an untapped export market. She founded Two Rivers Fisheries with the goal of converting the invasive species into an innovative food source— turning an environmental problem into an exporting opportunity. She now runs the largest U.S. exporter of Asian carp, shipping products to nearly a dozen countries. Listen as she discusses her exporting journey on this podcast.
Merrilee Kick was a teacher grading papers by the pool, enjoying a beverage in a glass jar when her entrepreneurial idea struck. The single working mother, raising two sons, turned the idea of a cocktail in the shape of a ball into her MBA thesis — and then into BuzzBallz, a company whose revenues are on pace to exceed $100 million. Recognizing the competitiveness of the domestic market, she saw the need to expand her sales internationally. Read more about her story here.
You can find more stories of U.S. companies who supercharged their success by taking their business global here. In addition, you can talk with trade finance specialists who work directly with small businesses to answer your questions — and help provide the financing and confidence you need to tackle the global marketplace.