Most U.S.-based small businesses rely solely upon domestic sales of their goods and services. The problem with this approach is threefold:
Over 95 percent of the world’s consumers live outside of the U.S.
Now that you’ve decided exporting is a strategic imperative for your company, what do you do next? The first step is to decide what market is best for you. Things to consider include:
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Which markets will be most receptive to the company’s goods and/or services?
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How will selling internationally affect the company’s operations?
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How do I mitigate risk while entering unchartered waters?
Let's look at each of these in turn.
Which markets will be most receptive for my company’s goods and/or services?
There are many resources that can help answer this question:
The International Trade Administration offers a full complement of services including:
Export Counseling
International Customer Profile – detailed analysis of specific overseas buyers
Business Matchmaking – introducing U.S. companies to potential international buyers
Trade Missions
Other services export.gov
Country Commercial Guides (CCGs) containing analyses of economic, political and marketing conditions around the world are prepared annually by trade and industry experts at U.S. embassies for the U.S. business community. The guides are provided at no cost by visiting the export.gov website Country Commercial Guides.
The Export-Import Bank of the United States' (EXIM) Country Limitation Schedule – listing of countries where EXIM Bank is willing or unwilling to provide financial tools like export credit insurance or a working capital lender loan guarantee. Country Limitation Schedule
How will selling internationally affect the company’s operations?
When choosing an export market, think about the implications of different time zones, product installation and servicing, and understanding the local language and business customs.
Many U.S-based companies have their eyes on countries in Asia, which is great. One thing to keep in mind is the 12 hour time difference between New York and Beijing. Teleconferences, webinars and other real-time communications require flexibility on both ends. Be sure your staff and the international buyer’s staff will accommodate non-traditional business hours.
Also think through how you will service your product in a market that may be 8,000 miles or more away. Do you have employees that will travel long distances when needed? Can you get replacement parts/systems through customs in a timely manner?
Finally, there’s nothing like speaking the same language. Are you or some of your employees native speakers of a foreign language? Has anyone on your staff lived and worked overseas and is knowledgeable about local customs? Perhaps one of your colleagues has international contacts that can work with you.
How do I mitigate risk while navigating unchartered waters?
Export credit insurance from EXIM is one way to mitigate risk for new and existing exporters by insuring your foreign receivables against nonpayment by international buyers. Once you have chosen your market, export credit insurance empowers you to offer credit terms to buyers in that market, secure in the knowledge that your receivables are protected from nonpayment.
So, consider the benefits of selling outside of the U.S., choose your market carefully and arm yourself with export credit insurance. Then join the hundreds of thousands of U.S. small businesses that are exporting today.
Want to learn more? Contact your local EXIM Bank representative for a free consultation.
