Why Companies Should Export - a by-the-numbers look

Ed Marsh | Sep 10, 2012

100% export growth between 2010 and 2015

why american companies should export - a by the numbers lookThat's the grand goal of the National Export Initiative.  Realistic and attainable?  Well, half-way through it looks like it may well be.  It was ambitious for sure, but in the context of the landscape of American business it actually should be a lay-up.

Why? 

Actually only 1.5% of American businesses export outside of NAFTA (and only 5% export at all!)  So while doubling sounds audacious, increasing from 5% to 10% sounds pretty manageable.

WIFM

But theory and good intentions eventually bump up against the reality of the email inbox - in other words, everyone is so busy with their regular work that undertaking new market initiatives seems to be a luxury.

But dig into the numbers...the benefits and ancilliary consequences of export...and you may decide it's worth simply deleting a few more of those messages and concentrating on your international business development.

"What's in it for me?" you ask?  Good question!

We've outlined these fun/amazing/compelling/motivating facts in our "Why SMBs Should Export" Infographic and are happy to share them here with you.

In no particular order:
  • 2,000% - based on Department of Commerce numbers, the increase in your potential market size by looking outside US borders (based on population)
  • 60% - companies surveyed by McGladrey Group self reported that that huge percentage of companies which classified themselves as thriving had substantially increased their export sales
  • 100% - the potential increase in your post tax profits if you take advantage of certain export preferences available (dumbstruck?  wondering why your accountant hasn't mentioned this for the last 5 years if your export?  I would be too...call me and I'll explain more!)
  • 2-5% - the typical premium of pay which workers receive when their employers export
  • 10, 50 or 100%? - the impact on your company valuation through a vibrant export program can be enormous
  • 30-50% - want to get serious about building your export sales?  If you pursue it strategically, and with a strong commitment, you can expect to match the results of other companies which have achieved this level of export sales (vs. revenue) within several years

But it's too risky

You might be surprised...but you wouldn't be the first who has told me that they will walk away from this enormous opportunity because of perceived risk. 

There are realities and there are myths.  And most of the real risks which are found in international business are also found in domestic business...you just don't think of them consciously that way because you intuitively manage them.

But issues of payment, credit risk, foreign currency fluctuations and logistics are honestly easily managed.  In fact, in the case of credit risk for instance, you can purchase a very inexpensive insurance policy to protect you against that exposure.  Then you can completely skip the hassle and expense of L/Cs (make your life easier) and offer many of your international customers open account terms (make their life easier and become a preferred vendor!) 

So if you want an excuse to toss around at holiday parties to explain why you missed the amazing growth opportunities in Africa or ASEAN, for instance, then feel free to blame risk.

But if you are serious about growing your business, then learn about our approach for SMB business growth.

Contact Consilium Global Business Advisors today.