According to the most recent International Trade Association data available through the federal Small Business Administration, small businesses represent 97.7% of the U.S. firms that export goods to other countries. In fact, they account for more than a third of the country’s known export value.
With business technology ever evolving, expanding collaboration and communication capabilities, we can assume that more small-business owners will want to seize opportunities to extend their customer base beyond the border. With 96% of global consumers living outside of the United States (according to the U.S. Department of State), reaching a global market can fuel revenue growth and offer some protection against fluctuations in the U.S. domestic markets.
If you’re considering doing business internationally, realize the opportunities are accompanied by risks. Business owners must pay attention to issues they don’t normally have to consider when providing goods and services within the U.S.:
» Protection of intellectual property rights;
» logistics of getting paid;
» taxes and tariffs imposed by other countries;
» undependable postal and delivery services in other countries;
» other countries’ diverse rules, restrictions and license requirements for shipping products to them;
» increased shipping costs to send products overseas;
» cultural expectations in doing business;
» trust issues when working with far-away partners or agents; and
» language barriers.
Fortunately, several resources exist to help business owners understand what’s involved and how to move forward:
Office of International Trade. This Small Business Administration office works with other federal agencies and public and private groups to help small businesses compete in the global marketplace.
U.S. State Department’s Direct Line to American Business program. This program gives small businesses direct access to ambassadors and economic and commercial experts at more than 260 embassies and consulates in 190-plus countries. The State Department also operates the Business Information Database System, a portal to help U.S. companies learn about international projects that may offer business opportunities.
U.S. Commercial Service’s Gold Key Matching Service. This service can help small businesses by connecting them with pre-screened representatives, distributors, professional associations, government contacts, joint venture partners and other individuals and organizations.
Export.gov. This site provides links to information about doing business in specific countries. It offers insight and data about various countries’ cultures, business climates, market research, service providers, trade events and other information.
Because of the added complexity involved in expanding a company’s reach to other nations, it’s helpful to seek guidance of an attorney and accountant for legal and financial direction.
As you develop your business plan for selling products to the global market, you also can gain insight and feedback from a SCORE mentor.