Thinking about exporting

Thinking about exporting? Here's how to get started.

You want to grow your business – have you considered exporting? Ninety-six percent of the world’s population lives outside the United States. That’s a motivating statistic for any business owner. Why would you sell to only 4 percent of your potential customers? Many American companies have found that exporting is a great way to increase sales, increase market share, employ more people in their communities and bolster the U.S. economy. In “Trade Matters: What you should know about doing business internationally”, we talked about how businesses looking to export have a wealth of resources available to them. In this article, we’ll talk more about the resources, strategies and tips to help you get started.

Guidance

If you are just starting to consider exporting, you will likely have many questions. There are organizations that offer export advisory services that can answer the questions you ask – as well as the ones you don’t know to ask.

You might look at:
  • The U.S. Commercial Service helps U.S. companies start or expand their exporting business. With representatives in over 100 U.S. cities and 75 countries around the world, the Commercial Service provides export counseling, market intelligence, business matchmaking and commercial diplomacy. They can help you identify international opportunities for your business and recommend strategies and plans for successful exporting. The Commercial Service acts as a business’ advocate, making connections and addressing regulatory, financing and customs issues. To learn more about how the U.S. Commercial Service can help your business, visit export.gov. The Gold Key Matching Service, offered by the U.S. Commercial Service, helps you set up a network of international trade partners through arranged appointments with pre-screened prospects in various countries. The program has a 90% success rate of matching American companies with trade partners overseas.
  • The World Trade Center (WTC) connects businesses globally to help U.S. businesses prosper. Through the WTC, business owners can plug into a community of like-minded international business contacts. Joining a WTC gives you access to their global network as well as integrated trade services like market intelligence reports, training and more. The WTC in Kansas City is a member of the Global Cities Initiative (GCI), a network of cities across the U.S. working together to support exporting, connect U.S. and foreign cities and advocate for trade-friendly policy. The GCI provides an export concierge service. St. Louis, Wichita, Des Moines and Indianapolis are also GCI members, and it is worth looking up resources that may be available near you.
  • Trade Councils located throughout the Midwest connect business owners to experienced exporters. For example, District Export Councils (DECs) are groups of business leaders that provide counseling on all aspects of selling internationally, from marketing strategies to breaking into a new foreign market. Other trade councils and associations include Greater Ozarks International Trade Association in Springfield, Missouri, Midwest International Trade Association (MITA) in Omaha, Nebraska and International Traders of Iowa in Eastern and Central Iowa. Search for local trade councils in your area.

Networking

Sometimes in business it’s about who you know. It’s no different in international business. Many of the organizations discussed in the previous section can connect you with the right international contacts, but two other good ways to build a contact network are through international trade shows and trade missions.

International trade shows attract companies from all over the world to the U.S. These industry-specific events are a great opportunity to connect with foreign buyers, start building an international contact network and discover opportunities abroad. Organized trips abroad, called trade missions, directly introduce you to foreign markets that you hope to enter, providing unparalleled access to decision makers through the U.S. Embassy. Trade missions are sponsored by the U.S. Commercial Service and other organizations.

There are also international networking opportunities in your local community. For example, in Kansas City, the International Relations Council hosts forums and panel discussions with world leaders and dignitaries, and the Economic Development Corporation of Kansas City and Kansas City Mayor’s Office create opportunities for businesses to form global connections. Another organization, Global Ties U.S., has affiliates across the country including in Kansas City (Global Ties KC) and St. Louis (World Affairs Council of St. Louis). Global Ties and its affiliates work in conjunction with the U.S. Department of State to connect business professionals with their foreign counterparts through international exchange programs.

With a little research, you can find networking opportunities in your city and start building a base of international contacts. The relationships you can gain from it are what make the difference.

Grant Money

Building international relationships and attending trade shows costs money. Fortunately, the STEP program, sponsored by the Small Business Administration (SBA), gives financial awards to small businesses that can be used for reimbursement for trade show expenses, Gold Key Matching Services, professional export training and trade missions. The amount of grant money varies by state. For example, in 2017, Missouri made $845,512 available through the STEP program, Kansas offered $510,667 and Iowa provided $173,333. To learn more about the STEP program and how much was made available in your state, visit the STEP website.

Other organizations and agencies offer micro grants that cover additional expenses related to international business, such as marketing production, translation services and market research.

Financing

As with any new business venture, exporting may require additional financing. Often times, the available financing tools vary by foreign market. The Export-Import Bank of the United States (EXIM Bank) and the SBA, along with organizations in the private sector, have financing solutions tailored for exporting.

EXIM Bank helps businesses fill the gaps in export financing that private financing won’t cover with several options:
  • With a working capital guarantee, both EXIM Bank and SBA can help you secure financing from your bank. EXIM’s guarantee allows a bank to include foreign receivables and inventory for export as useful collateral.
  • Export credit insurance for short term receivables can help ensure you’re protected if a buyer fails to pay you. EXIM Bank will verify your foreign buyer’s creditworthiness and insure 90-98% of your receivables with that buyer. With foreign accounts receivable insured, many private banks will recognize them as an asset and allow you to borrow against them. Private sector insurers also offer competitive solutions and can customize programs based specifically on country risk or concentration risk.

Banking

When it comes time to export, you’ll want to have a standing relationship with a bank. Start one early on, even before you need their services, so they can learn about your business and be ready to help you when you need them. They will have knowledge of your industry and exporting, and you want to make sure they can continue to meet your needs as you grow. While a banker’s primary role would be to help with financing, you can also look to them for guidance and help finding solutions to your unique challenges. A banker can also connect you to a network of resources including government agencies, international trade shows, logistics and freight companies, international attorneys, trade associations, research and data on other countries and other exporters. There is a whole ecosystem of resources ready to support your efforts globally.

There is a broad network of resources available to give you confidence and courage as you begin exporting. Use them to build a network of international contacts that will help you develop and execute your exporting strategies. Don’t let the challenge of just getting started stop you. 96% of the world is waiting to use your products and services.