3/7/2014
There is a common, yet erroneous, belief among many domestic business owners that only large businesses have the ability to sell to a global market. Many companies, believing that only large US manufacturing exporting companies can be competitive in the international market, don’t explore the opportunity. This unfortunate misconception has prevented many US manufacturers from experiencing the potential sales growth from exporting their goods overseas.
According to the US Small Business Association, small businesses account for 97 percent of all US exporters. The problem is that while the largest pool of exporting companies is comprised of small businesses, very few of them actually seek out the global market. This represents huge untapped potential that the majority of US manufacturers are missing out on because they only focus domestically!
International Growth
US customers only account for five percent of the potential consumers in the world. That’s a fraction of the consumer pie. Manufacturers who fail to see the importance of exporting will be limited to this mere five percent. Some analysts’ projections indicate that 90% of all growth will be outside the US market over the next five years. Businesses that get in the game now have the added benefit of smoothing out any economic risk should the US recovery stall. Having a diverse customer base helps limit the effects of any economic downturn experienced by any one country.
An Open Market
US exports have increased more than five percent in recent years, with the greatest growth in exports to China, Canada and Mexico. The Free Trade Agreement (FTA) has given US manufacturing exporting companies the ability to trade with at least 20 different countries around the world, including Australia, Canada, Mexico, Morocco, Honduras, Panama, and Peru. US manufactured goods exports to FTA partners grew 6.8% in 2012, compared to 2011. These governmental agreements, along with the capabilities of the Internet, have made trading globally easier than ever before. In a slightly dated, but no less relevant, article from Entrepreneur.com, writer Gwen Moran identifies 10 hot export markets for small businesses. With less than one percent of US manufacturers currently selling their products overseas, now is the perfect time for any size company to join the market.
National Export Initiative
While the road to exporting is not always smooth, there are many resources available to assist in navigating international waters. The government has set up the National Export Initiative (NEI) to help US businesses, including manufacturers, receive the resources they need to start an international sales campaign. This program can help US manufacturers find global customers, apply for governmental international contracts, and provide a wealth of information about setting up a US manufacturing exporting company. This initiative is designed to encourage more businesses to export their goods and to increase US exports worldwide.
Michigan Resources
As a subset of the US Small Business Administration, US Export Assistance Centers (USEACs) are located in major metropolitan areas throughout the US. Their mission is to provide help for small business owners in further developing their exporting plans and initiatives. Michigan offices are located in Detroit, Grand Rapids, and Pontiac. Grand Rapids is also home to the Van Andel Global Trade Center through Grand Valley State University. MMTC also has experience conducting international market research and website reviews to reduce cultural barriers and language ambiguity.
Everybody Wins
US manufacturers have the ability to greatly increase their clientele and overall sales by expanding into the global market and reaching the other 95 percent of the world’s consumers. US manufacturing exporting companies not only grow their own personal sales but they help to increase the presence of the United States in the worldwide market.
This, in turn, will help to grow the US economy and keep the US dollar strong. As US exports continue to grow and more US manufacturing companies export, the US can expect to see a surge in new manufacturing jobs across the country to meet this demand. This will also help to stabilize and improve the domestic economy, by creating job growth and increasing revenue!
Since 1991, MMTC has assisted Michigan’s small and medium-sized businesses compete and grow. Through personalized services fitted to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.mmtc.org. (Image Source)
Categories: Export