Expand Your Business with International ExportsHugh Connelly, CFA, President, Univest Capital, Inc.
As the United States continues through another 2% GDP growth year, many businesses are beginning to look overseas for sales growth, and for good reason. Nearly 96% of the world's consumers live outside the U.S. These consumers represent 67% of the world's purchasing power. You may read this and think that exporting is only for very large companies, but that perception is incorrect. According to the Small Business Administration (SBA), 250,000 small businesses exported 97.6% of the $2.2 trillion exported by the United States in 2012.
Again, you may read this and think, it's exporting activity from the Midwest (manufacturing) or California (high-tech), but again, that perception is incorrect. The Commonwealth of Pennsylvania ranked 11th in U.S. exports in 2012 with $38.9 billion! The five largest markets exported to were Canada ($11.4B), China ($3.5B), Mexico ($2.6B), Japan ($2.1B) and Germany ($1.8B).
There are many benefits to exporting – faster sales growth, increased productivity and higher profits. However, the exporting business is highly complicated. You may think, "my business isn't sophisticated enough to even contemplate exporting." Wrong again. Main Street is going global, don't miss out on opportunities for your firm. Watch a YouTube video from Philadelphia-based Bassetts Ice Cream, which has notched big growth from international sales.*
If your company makes a good or service that can be sold abroad, you should be doing so. Exporting may not always be what you think. For example, did you know that selling to the United Nations in New York counts as exporting? Think of how close New York City is. There are websites that seek exporting proposals, and, in some cases, they may even seek small businesses to fulfill the bids.
If you're interested in exporting your company's goods or services, one way to learn more is to take the free Export Readiness Self- Assessment.* The next steps are to obtain training and counseling, create an export business plan, conduct some global market research (which can be done for you by government agencies), connect with overseas buyers and obtain export financing and/or credit insurance (this can be done with SBA assistance).
Exporting can be a big boost for your business, however, a sound exporting plan takes time and effort. Make time in your 2014 budget for an export business plan. You may be very glad you did!
Univest Capital, Inc. is a subsidiary of Univest Bank and Trust Co.
* Univest Bank and Trust Co. does not control or guarantee the accuracy, relevance, timeliness or completeness of information contained on a linked website.