Want to Grow Your Company? Export
I was shocked to learn that only 1 percent of American companies export their products. More shocking still, of those companies that export, 58 percent of those companies export to only one country. Though it would seem like common sense that businesses that want to grow should be constantly be looking for new markets, the export statistics don’t bear this out.
I recently spent some time with the Under Secretary of International Trade, Francisco Sanchez. From Sanchez’s perch at the Department of Commerce, one of his main tasks is to increase the amount of goods and services that American companies sell in foreign markets. He is one of several government officials charged with implementing President Obama’s National Export Initiative, which calls for the doubling of U.S. exports in five years. By selling more of our goods to foreign consumers, we will not only add to the expansion of our economy, but also create jobs at home to fulfill the demand of foreign consumers.
So why don’t more U.S. companies export their products and services? Sanchez thinks that for too long American firms became complacent operating in just one market. With over three hundred million American consumers, why would companies need to go through the hassle of filling out customs forms, finding overseas distributors or dealing with consumers whose main language is not English? Sanchez countered that, according to the World Bank, 87 percent of global economic growth in the next decade will happen outside of the United States. Since 95 percent of the world’s consumers do not live in the United States, American companies that aren’t competing internationally will not keep pace with global economic trends and their businesses will suffer.
So where should business owners turn if they are interested in exporting? As I see it, there are three main groups that can help American companies break into foreign markets.
First, is the United States Government. The International Trade Administration’s United States Foreign Commerical Service (FCS) maintains U.S. Export Assistance Centers in 109 cities across the United States and in over 80 countries around the world. They offer advice on how to export and can connect you to “commercial counselors” in overseas markets–government employees, usually based in American Embassies–who can help determine pricing for your products and can serve as a matchmaker to connect your business to new customers, suppliers and distributors. The FCS can also represent your company at trade shows around the world. FCS’s Gold Key Service offers a suite of these options for a very low fee–only $700 for each day of assistance they provide in a foreign market.
Other U.S. Government (USG) agencies offer export assistance as well. Check out the Foreign Agricultural Service, The Export-Import Bank, The Overseas Private Investment Corporation, The Small Business Administration’s Office of International Trade, and the U.S. Trade and Development Agency.
The USG isn’t without direct competitors. There are several private firms that offer assistance to companies looking to expand their horizons. These companies tend to charge more for their services, but may fill certain gaps that our government is incapable of executing. These competitive advantages could include specializations along certain market verticals or in countries where no other export assistance organizations are operating. I’ve sampled just a few below:
TSI Global Consulting
Helps small and medium sized manufacturing enterprises understand the competitive landscape in foreign markets. Their services include: foreign partner searches, U.S. export license applications and filing, and competitor assessment.
Unz & Co
Unz offers help with export control issues, trade compliance issues, record keeping and can help your company take advantage of trade preference programs that are parts free trade agreements that the United States has signed with other countries, including NAFTA.
They focus on export compliance—ensuring that companies comply with trade laws and regulations both as products or services leave the United States and as they arrive in the country of export.
Finally there are companies who also stand to gain from your company’s ability to export and find new markets in foreign lands. For instance, FedEx and UPS offer services to small businesses to help them fill out customs forms, pay foreign duties (where applicable) and comply with regulations that may not be apparent to new exporters. Of course, these companies want you to use their services when you ship your products, creating a win-win situation for small business owners and the big boys alike. Some of these companies have even partnered with the government because they know that by helping small companies export, they can also add to their bottom line.
So how do you decide which option is right for you? It really depends on your business. Since the “government option” isn’t trying to turn a profit, their services are usually cheaper, but their resources are limited by the same constraints that hold back most other government agencies. Private export assistance firms may offer different or more specialized services than the government, but they will charge you for it. Companies with some skin in the game can certainly be helpful, but their ability to deliver a complete line of services may be lacking. FedEx and UPS know a ton about shipping, but how much do they know about matchmaking or product pricing in your industry?
Regardless of which option your company chooses, our country’s economic future depends on your company’s ability to grow. Exporting can serve as powerful tool for your firm to find new markets, new partners and new profits that will lift our economy out of the Great Recession.