Small Business Exports Guide | Tory Burch Foundation
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The Beginner’s Guide to Exports
Get your business ready for the world.
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Companies that export grow sales at a faster pace, create more jobs and are less likely to go out of business, according to the U.S. Department of Commerce. In fact, according to the latest agency data, small business exports, or exports from companies with fewer than 20 employees, comprised over half of all U.S. exporters in 2020. Firms that utilized ITA’s services that year saw an additional 5% growth in annual revenue. “Exporting is not just for big multinational companies,” Kendee Yamaguchi, Deputy Assistant Secretary for the U.S. Field at the International Trade Administration, explained during a special edition of our webinar series, presented in collaboration with the Department of Commerce.
Exports are crucial for powering the U.S. economy.That’s why the International Trade Administration (ITA) works to increase national exports and advocate for U.S. business interests abroad. They are especially interested in encouraging more underrepresented founders to bring their goods and services to foreign markets. However, navigating the complexities of global trade, such as dealing with foreign regulators, tax laws, and supply chains, can be especially overwhelming for small business owners.
Thankfully, there are federal resources available to help. With more than 100 offices across the country, the agency provides counseling services, market intelligence, and networking opportunities to help U.S. businesses of any size compete more effectively on the global stage.
ITA officials and their partners are available to help any business owner who is ready to start exporting, but entrepreneurs should make sure they are able to commit the necessary time and money, said Tricia Van Orden, Deputy Director of the Trade Promotion Coordinating Committee Secretariat.
“The first question you need to ask yourself is, ‘Do you want to invest in this?’ because exporting can really pay off….but there is an upfront cost,” she said.
So, is your business ready to take on the world? Ask yourself these questions before taking the next step.
HOW DO YOU FIND THE RIGHT FOREIGN MARKET?
Ecommerce platforms have made it easier than ever to do business internationally. In many cases, it’s as simple as toggling a switch in your website settings.
“If your company has a web presence, it already has a global marketing and international sales platform,” said Yamaguchi. ITA offers a Website Globalization Review (WGR) Gap Analysis service to help ecom businesses appear more often in web searches made in a designated country.
But business owners should be careful not to enter new markets haphazardly. Review a country’s trade policies and common payment methods before you set up shop.
Trade Policy
Some countries charge tariffs, or a tax, on imported goods, which makes it harder for exporters to compete with domestically produced alternatives. You can use the ITA’s Tariff Tool to measure the potential impact of doing business in a particular country.
Payment Method
While debit and credit card payments are dominant in the U.S., other regions may be more reliant on cash, or peer-to-peer payment systems similar to Zelle. How quickly and reliably you get paid can depend heavily on the type of payment customers use. You can purchase export credit insurance from The Export-Import Bank of the United States (EXIM), to avoid losses or cash-flow problems from this kind of risk.
For first-time exporters, Van Orden suggests picking a country that has free-trade agreements with the U.S. and a similar financial system like Canada so they can learn as they go.
“You don’t know what you don’t know,” she said.
DO YOU HAVE THE RIGHT PRODUCT FOR THIS NEW MARKET?
After picking a target market, you need to make sure the product or service you’re selling is a good fit. Businesses should be prepared to make changes to their existing offerings so they are compliant with local requirements and relevant to customers in that specific country. During this step, it’s important to keep in mind that local regulations, cultural practices and intellectual property rights may be different in the target market.
Local Regulations
Not surprisingly, different countries will have different laws, and those laws will affect how you manufacture, sell and market your product. For example, U.S.-based founders may have to adjust to unique ingredient disclosure standards when they take their consumer packaged goods abroad. ITA’s country– and industry-specific commercial guides are good places to get a sense of the landscape you’re interested in.
Cultural Differences
Discrepancies in business customs extend to cultural differences that if not carefully observed, could harm your business. For example, in Japan, it is customary to bring partners or clients gifts. Conversely, U.S. business guidelines deem gifts between business partners currently negotiating a deal dishonest and in some cases, illegal. ITA’s business culture overview will help entrepreneurs begin to understand some of those differences.
Intellectual property rights
Most patents issued domestically aren’t enforceable overseas. If you are concerned with your ideas being improperly copied by foreign competitors, you should consider applying for stronger protections entering international markets, Van Orden advised. ITA manages the inter-agency STOPfakes program, which helps domestic businesses keep their intellectual property safe.
WHO ARE THE PEOPLE WHO CAN HELP?
Having the right connections becomes even more important when you are doing business across borders. Regional contacts often represent your business when you can’t be on the ground yourself. Entrepreneurs are responsible for doing due diligence on the entities they choose to do business with abroad, and making sure they are compliant with the regulations for the countries on both sides of the deal.
ITA offers trade missions, or trips to target export countries to foster relationships between U.S. companies and local distributors and suppliers. Government-backed trade missions often generate more leads for small businesses than independent travel. Eligible businesses can apply for commercial service assistance to offset the cost of their exporting efforts.
ITA also helps convene groups of local international trade experts across the country in what they call district export councils to help answer questions from U.S. businesses and connect them to foreign partners. Council members are often professionals like tax specialists, patent attorneys and freight forwarders who can offer practical advice on entering global markets.
ITA also provides business matchmaking and vetting services online for a fee, but the best way to make sure you find the best option is to travel and meet people in person, even if it’s just meeting fellow exporters in your state, Van Orden said.
“Just about every community in the United States has an international business community,” she said. “You can hear others’ experiences, and learn from their mistakes and successes.”
