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Small Business Development Center
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Overseas Prospects Abound

November 20, 2011

The idea of competing overseas can be intimidating, although the successful experiences of small businesses abroad prove the opposite.

BUSINESS TIPS ARTICLE
David Rodriguez
ASU-SBDC International Trade Office Advisor

 

SAN ANGELO, Texas — The idea of competing overseas can be intimidating, although the successful experiences of small businesses abroad prove the opposite.

According to data from the U.S. Small Business Administration, companies that engage in international trade are 20 percent more productive, produce 20 percent greater job growth than non-exporters, and they are 9 percent more likely to stay financially solvent.

No business is too small that it cannot become a successful exporter. Indeed, the U.S. Small Business Administration estimates small businesses are responsible for 25 percent of U.S. export volume (in dollars).

Furthermore, 97 percent of all exporters account for small business.

One way to enhance business competitiveness is through expanding the customer base abroad. This provides an excellent opportunity to compete with foreign companies and encourage the creation of business efficiencies and product development.

Another milestone of international trade is the development of economies of scale. Small business can take advantage of products that already have an acceptance worldwide.

For example, a small company that produces pecans can benefit from the acceptance of this product globally. Therefore, there is no need to spend resources in adapting it to each national or local market around the world.

A major benefit of engaging in international trade is market diversification. Expanding to other markets offers a way to diversify the economic risk. When one’s local market is in a downturn, the income from the foreign market can compensate the losses caused by the home market.

Advancements in technology have significantly improved and widened the ways to export. Large logistics companies such as FedEx, UPS and DHL have developed a large distribution network that facilitates and simplifies the export process for small enterprises. It is surprising how fast and easy an international shipment process can be.

In the past few decades, the U.S. government has been working toward opening and granting access to more markets abroad for American companies through new free trade agreements and other international trade instruments.

Going global not only represents a big challenge for small businesses but a great opportunity of unlimited growth.

Engaging in international trade provides many advantages, but to be successful overseas, the small companies should prepare carefully before deciding to go for their international adventure.

“Business Tips” was written by David E. Rodriguez, Certified Global Business Professional and Graduate Assistant of Angelo State University’s Small Business Development Center — International Trade Office. Contact him at ito@angelo.edu.

 

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ASU Small Business Development Center
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E-mail: sbdc@angelo.edu