Despite increased competition from growing international economies, the United States continues to clinch its title as the world’s largest national economy and the second largest exporter of goods and services. Given the fact that Washington is the most trade-reliant state in the country, it should come as no surprise that trade is a fundamental component of maintaining the nation’s competitiveness and prosperity. Export trade is an aggressive catalyst for economic growth, promotes domestic family-wage jobs, and elevates the standard of living and quality of life for American families.
For small or medium enterprises (SMEs) with a traded product, 96 percent of the consumer base lies outside the geographic and political borders of the United States. As the international economy becomes increasingly interconnected, competition will intensify, requiring companies to adapt and expand to capture and retain their share of that international consumer base.
Luckily, as global competitiveness grows, so too does the ease and efficiency of export programs and opportunities for SMEs. Strategic focus on exports and new market penetration provides opportunity for marked increases in revenue and, when done well, proactive diversification of risk. To get started, there are a few things to consider:
1) Know your product, your business and your markets
Most importantly, SMEs must be able to self-assess the suitability of their product(s) and business strategy for export. In order to successfully export, even accidentally, an SME must sustain a consistent profit margin that can insulate cash flow from the additional expense and volatility of export costs and tariffs.
In addition to financial prowess, an SME must be apt in forecasting transit time for products moving from the U.S. to other nations, any impacts this may have on their domestic market and any legal, cultural and linguistic barriers that may be encountered. There are a wealth of resources to help SME’s consider and answer these questions, including the U.S. Commercial Service, U.S. International Trade Administration, the U.S. Small Business Administration and the Export-Import Bank of the United States. Technical resources are also abundant in the form of ExporTech, a program administered through the National Institute of Standards and Technology Manufacturing Extension Partnership, which brings together multiple streams of resources and experts to provide SMEs with targeted export plans and Gold Key certification.
2) Locate and validate trusted and competent international trade representation
One of the largest barriers to SMEs for export growth is the fear of the unknown, especially in international markets. Offered through the U.S. Department of Commerce and International Trade Administration, the Gold Key Matching Service screens and connects domestic enterprise with commercial opportunities overseas, setting meetings with corporate agents, distributors, business partners and sales representatives. This program also provides streamlined and vetted entrance into foreign countries and direct coordination with staff among the 294 U.S. embassies and consulates around the world.
3) Mitigate your legal risk
While exporting can certainly diversify an SME, it exposes domestic businesses to an array of new foreign laws. Be sure to work closely with a proficient and capable legal expert in the field and execute a contract that is incontrovertible, ensuring the firmest possible legal footing to stand on to avoid any form of international commercial dispute. Have a clear understanding of which jurisdictions and under what international circumstances the agreement is valid. Have somewhere concrete to turn to for redress, if necessary.
4) Utilize your network
Lastly, the most important places to start are with local and trusted business resources. Build relationships with local chambers of commerce, the local economic development council and government advocates with the SBA and the U.S. Department of Commerce. Let this local network safely plug you in to the resources you need to begin exporting.
Max Ault is the business development manager at the Columbia River Economic Development Council. He can be reached at 360.567.1055 or email@example.com.