The United States is increasingly exporting goods and services as part of its economy. In 2016, U.S. exports totaled $2.21 trillion. As this trend continues, more and more small- and medium-sized businesses are making the decision to diversify their market base by exporting products.
To help business owners decide if exporting is the right choice, we’ve compiled five reasons why U.S. companies should consider exporting.
1. There’s international demand for goods and services.
If a business has a product or service to sell, its leaders want to go where the buyers are — and that’s increasingly outside of the U.S. In fact, more than 70 percent of the world’s purchasing power is located outside of the U.S.
Exporting isn’t only for prosperous products, either. When a product reaches mature or declining stages of its lifecycle in the U.S., there may be an opportunity that provides a new life elsewhere. By targeting a foreign market where this product can be introduced, businesses have the potential to extend its lifecycle and profits.
2. Exporting improves the bottom line.
U.S. small and medium businesses that export outperform their nonexporting counterparts in several ways. In 2009, for example, exporting manufacturers had more than twice the total revenue of their nonexporting manufacturers. These exporters had revenue growth of 37 percent in the years leading up, while total revenue declined by 7 percent for non-exporting SME manufacturers over the same period.
Labor productivity is also greatly impacted by exporting. Measured by revenue per employee, the United States International Trade Commission found that labor productivity was over 70 percent greater for manufacturing exporters than for nonexporters.
3. American workers benefit from exporting.
Not only is exporting good for businesses, but it makes a big difference in the lives of American workers. For one, it’s bringing them jobs. In 2015, U.S. goods exports supported 6.7 million jobs and service exports supported 4.8 million jobs — that’s an increase of 1.9 million jobs in six years.
Exporting also improves wages for American workers. For every $1 billion in exports of a metro-area industry, workers in that industry earn roughly 1 to 2 percent higher wages (including those without a high school diploma).
4. Businesses can compete globally.
The U.S. is known throughout the world for high-quality products, innovative goods and services and sound business practices.
Entering the global marketplace improves a business’ chance of competition at home and overseas. It allows leaders to gain insights into industry trends and developments and puts them in closer contact to decision makers and influencers in key markets.
5. There’s government support available.
While it may seem daunting at first, there are government initiatives that can aid business owners. The Small Business Association provides counseling, training and financing to support small business export opportunities. Some of these include:
- Export assistance centers: Located in many major metropolitan cities, SBA export assistance centers offer one-on-one assistance for small or medium sized businesses. They’re staffed by professionals from the SBA, the U.S. Department of Commerce, the U.S. Export-Import Bank and other public and private organizations.
- SBA export loan programs: The SBA provides a number of loan programs specifically designed to help develop or expand export activities.
- General exporting resources: Small businesses have access to counseling, training, financial support and other resources for export opportunities.
Is your small business exporting?
Here at Apple Rubber, we work with domestic design centers and export final product to our global partners’ assembly centers. This way, we can control the design and quality of the product at a local level and don’t have to worry about it changing once we send it to other locations.
What small business exporting benefits have you found? Are you considering exporting for business? Let us know by tweeting us at @AppleRubber.