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There’s no question that for small companies, the competition for business offers inherent problems that larger firms never have to face.
With higher risks, fewer employees and often less capital, small businesses must make do with the resources available to them.
Recently, small businesses have leveled the playing field by exporting products and services, enabling them to reach a wider range of customers.
According to the U.S. Department of Commerce, small and medium-sized companies account for almost 98 percent of growth in new exporters, although they make up only about 30 percent of the total export value of U.S. goods.
Beyond The Borders
The growth in small-business exporters results in increased revenue and a positive effect on the local economy, according to the Department of Commerce.
“Ninety-five percent of the world’s customers live outside of the United States, so if a business is only selling domestically, they are reaching just a small share of their potential customers,” said Curt Cultice, senior marketing specialist for the U.S. Commercial Service, a governmental agency dedicated to aiding U.S. businesses in promoting economic growth through the process of exporting. While the majority of the U.S. exporters are larger companies, small businesses have begun to start a trend in exporting, realizing that they too can also export their products and services, Cultice said.
“Smaller businesses often have misconceptions about exporting , they may think it’s too burdensome, believe it’s just for larger firms, or are not aware of the services offered by the U.S. government, including the Commercial Service,” Cultice said. “The Commercial Service works to help inform these companies of their export potential.”
The Commercial Service provides a global network of export assistance to small and medium sized businesses throughout the United States.
Through these partnerships, the Department of Commerce’s Commercial Service program introduces small businesses to potential export companies and acts as the liaison between the companies.
For companies that contact a Commercial Service office, they are able to gain access to an entire worldwide network of export assistance, Cultice said.
Tradesur, Inc., a San Diego-based construction export management company, has been working with the U.S. Commerce Department since April 2002 and recently completed its fifth export sale to Mexico.
“When we participated, the direct impact was an increment in sales by 40 percent for this year,” said Andres Bonomie, Tradesur’s chief executive officer.
With only six employees, Tradesur, a construction supplier, has been working with Gas Natural Industrial, a Torreon Coahuila, Mexico-based developer of natural gas, exporting American made construction materials and polyethylene piping.
The supplies and piping will allow for the construction of natural gas distribution systems in a series of Mexican border cities, Bonomie said.
Gas Natural Industrial, until its purchase order with Tradesur, had bought all its supplies from within Mexico, Bonomie said.
“For this project we are talking about $1.6 million in purchase orders and it is increasing every day,” Bonomie said. “Every day we are receiving more purchase orders from them.”
Good For The Economy
Exporting not only helps the company itself, but also the economy as a whole, said Julia Rauner Guerrero, San Diego’s senior international trade specialist with the Department of Commerce.
“The U.S. Commercial Service’s San Diego Export Assistance Center assisted 198 San Diego-area companies to expand their exports and find new international distributors for their products,” Guerrero said. “These companies exported a total value of $70 million in U.S. manufactured products through the assistance of U.S. Commercial Services programs.”
Almost all of which were small and medium sized companies, she said.
“The whole idea beneath it is it all supports U.S. jobs,” said Sandra Donzella, senior business development officer for the Export-Import Bank, the official export credit agency of the U.S. government. “That is really the underlying reason why we exist , to try and sustain and enhance U.S. jobs.”
In San Diego, Ex-Im Bank has supported about 100 businesses in finding the necessary financing in order to complete the exporting process.
Ex-Im Bank provides credit insurance, working capital and loan guarantees that enable U.S. exporters to compete more effectively, while minimizing the risks of doing business overseas, Donzella said.
“Financing is likely to become an important consideration in exporting,” she said. “We help the exporter get the sale by making the financing available. Through us, the exporter is giving their buyer access to financing.”
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