Jim Herrin, Director
Salt Lake Region Small Business Development Center
Global trade has been in the news daily with the threat of trade wars looming. Although this article is not to give a diatribe on trade barriers, I will say that open and free trade is in the best interest of everyone. In the very short term, if the threats create a more level and open global marketplace, then it may be worth the “saber rattling”. On the other hand, if it turns into an all-out trade war, a few protected companies may benefit but everyone else will suffer. We currently are in an excellent economy, but the future could be at great risk if a trade war occurs.
So why would you want be in global trade? Well, the answers are many. Here’s a few:
- 96% of the world’s consumers live outside of the U.S.
- They represent 75% of the world’s purchasing power
- Increase your revenues and enhance your cash flow
- You can mitigate your company’s risk though market diversification (same reason you diversify your investments)
- Increase your company’s market share
- Enhance your competitiveness, even domestically
- Access lower cost structures (sourcing products/parts from countries where the production of them is a comparative advantage)
- There are more resources available to assist exporting companies than domestic only companies (It may even be easier to access foreign markets than the U.S. market)
- “Made in U.S.A.” has strong advantage in most foreign markets
These are just a few important reasons to go global. In other countries, most businesses think globally from the start, and must access foreign markets to survive. For most U.S. companies, the domestic market is so big and strong, they prefer to stay at home. In fact, only 25% of U.S. manufacturers export, and these are only exporting to 4% of foreign markets; 60% of these exports go to Canada and Mexico.
The only way communities can survive and grow is to bring outside money into the community. If a community does not bring in outside money, they won’t grow. The same money just cycles through the community and loses value. This is the same for countries – look at the more closed society countries, such as North Korea. If the U.S. companies that could export would, what kind of incredible growth would exist?
Of course there are some businesses whose products or services are not exportable. Nevertheless, we have many companies in Utah that could. Many non-exporting companies get requests to purchase their products from foreign buyers, but are ignored. Are you too losing the opportunities to substantially increase your company’s value?
Now, because of technology and ease of communication, the potential of exporting is much greater. In China, the biggest shopping day, called Singles Day, is about seven times bigger than our Black Friday. Think about being able to tap into that opportunity! Some U.S. companies have, very successfully. The prospects to enter and benefit from exporting are much greater, and geography is much less of an issue than it used to be. Home-based businesses and rural companies have opportunities that never existed before.
So, how can you exploit these opportunities? There are many resources here in Utah to facilitate your efforts to enter foreign markets. There is no cost counseling, workshops and conferences, market research to identify best markets, grants to help you learn and make connections through trade shows and missions, programs to identify potential agents and buyers, in-country assistance, loan programs for starting or expanding your export efforts, and other assistance in every aspect of exporting.
So, what is your first step if you want to start or expand your exporting efforts? Meeting with a business advisor at the Salt Lake Region Small Business Development Center (SBDC) at the SLCC Miller Business Resource Center (MBRC) in Sandy is a good first step. The Salt Lake SBDC has a wealth of experience and expertise that can get you started and pointed in the right direction. We can provide ongoing one-on-one counselling in all aspect of exporting, conduct an export readiness assessment of your company, help identify best markets, assist you in creating your export strategy, help you find and apply for funding your export efforts, and get you to the key resource providers you need when you need them. The MBRC also houses the Global Assistance Center. This center provides 30 hours of comprehensive export training in a classroom setting. Participants in this program come out with an Executive Certificate of Global Business Management and are prepped to take the NASBITE Certified Global Business Professional exam.
If you don’t know if your product or service is exportable, contact me. If you are interested in making your business global, contact me. If you are exporting and want to expand, contact me. If you are having problems and don’t know how to solve them, contact me. If you want to know where to go for a particular resource or purpose, contact me. I have 30 years of global business experience, so contact me…we don’t charge a thing for our services.
Jim Herrin, Director
Salt Lake Small Business Development Center