Is your small business exporting? If you’ve ever thought about it, now’s the time. New statistics from the Commerce Department show that U.S. exports of goods and services rose by 16.7 percent in the first quarter of 2010.
Part of that growth is due to enhanced efforts by Export-Import Bank (Ex-Im Bank) of the United States to reach out to small businesses and help them get the financing they need to get involved in exporting. The efforts are part of the federal government’s National Export Initiative, which President Obama announced earlier this year. The initiative seeks to double U.S. exports and create 2 million U.S. jobs in the next five years.
U.S. exports in the first quarter of the year totaled $434 billion, with the largest percentage increases occurring in Taiwan (80%), Korea (66.2%), Malaysia (49.2%) and China (46.6%). “Major opportunities exist for U.S. companies to break into or expand business in that region, backed by Ex-Im Bank financing,” said Fred P. Hochberg, chairman and president of the Ex-Im Bank. “Our goal is to create more opportunities in more countries so U.S. businesses can reach more customers, and in doing so create more jobs.”
Ex-Im Bank’s loan authorizations more than doubled to $13.2 billion during the first half of the current fiscal year (starting Oct. 1, 2009), a 125 per cent increase over the record $5.9 billion authorized during the same period in fiscal year 2009. Small-business export loan authorizations increased half a billion dollars during the same period to $2.3 billion, 28 per cent greater than the first half of fiscal year 2009.
Last month at Small Business Week in Washington, DC, I had the chance to talk with Dale Hayes, VP of U.S. Marketing for UPS, who told me less than 1 percent of U.S. small businesses currently export-even though there’s huge demand for high-quality, American-made products. UPS is working with federal agencies to help show entrepreneurs how simple exporting can be.
I recently talked to one small-business exporter, Dan Perkins at Couch Guitar Straps, for an article I wrote for Success magazine about taking your business global. Dan started exporting almost by accident when foreign customers began requesting his products, but he quickly learned the ropes and now says foreign sales are a key part of his business.
Sure, exporting might sound scary-Hayes told me cultural and language issues, along with plain old “fear of the unknown,” keep many U.S. business owners from exploring it. But the latest UPS Business Monitor survey found that more than one-third of small businesses that export see a “significant” impact on their sales.
If you’re ready to consider exporting, you’ll find lots of resources in my Success article. UPS offers resources on its website too.
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Just to clarify – “small business” by the government’s definition is all businesses with less than 500 employees, which is 99.7% of all businesses. So when the VP of UPS says only 1% of exporting is by small business, it means 99% of it is by companies over 500 employees, and likely the other 1% by very large companies that the SBA still defines as small.
The system is not set up to help true small businesses export at all (a good definition of small business is under 20 is a good measure, the Australian govt. says it’s under 15).
Did you ask Dale Hayes to further explicate what ” high-quality, American-made products” he feels have high demand? I’d be interested to know.
I’ve always been intrigued by exporting, Rieva. Thanks for this post.
Per Chuck and Robert’s points, it seems that it is time for the SBA to recalibrate, or reinvent itself and redefine what a small business is. I have always used the figure of $100M and less, but even that isn’t small, really. I think Australia has it right: Under 20, under 15 employees.
Getting the SBA to reinvent itself is not likely going to happen without a lot of outside momentum. It exists to serve the big business/big government/big unions triangle of power and these guys don’t want 28 million local businesses to have a seat at the table to stop the pandering, bailouts, and ongoing back-scratching between them.
We’re going to have to do it from the ground up and keep the awareness up that the SBA is really the MLBA – medium to large business administration. I’ve started a number of posts on this on Business.gov, including this one – http://bit.ly/9PzGmj – which the author of this article responded to (the SBA/SCORE is a client of hers).
There is no better time than now for small businesses to get out of their own backyard and start exporting. The world needs to be tapped!
Thanks for writing such an important piece Rieva.
Rieva: Have you seen certain export markets that are most interesting at the moment?