International Trade Appropriate for US Small and Medium Businesses?

http://exim.eu.com/feasibility_study_services.asp

 

The answer is definitely yes! According to the U.S. Department of Commerce, big companies make up about 4 % of U.S. Exports.  Which means that 96% of exporters are small companies. Why is international trade so important to starting small and Medium businesses?

 

In some cases the products or services you may wish to market are not available or made in your home country. For example, think about selling cashmere sweaters. You may need to become an importer in order to compete with imported products sold by your competitors.

 

International trade is enormously beneficial for entrepreneurs and enables producers of goods and services to move beyond the U.S. market of 280 million people to the world market of 6.2 billion.

 

While international trade accounted for 5% of U.S. economic growth in 1950, today it has become an integral part of business, accounting for more than 25% in 2002. For many small companies importing and exporting is becoming an essential cornerstone in achieving success, yet it requires knowledge of business disciplines far beyond the basic do’s and don’ts of operating a domestic business.

Advantages and Disadvantages of International Trade

Advantages to consider:

  • Enhance your domestic competitiveness
  • Increase sales and profits
  • Gain your global market share
  • Reduce dependence on existing markets
  • Exploit international trade technology
  • Extend sales potential of existing products
  • Stabilize seasonal market fluctuations
  • Enhance potential for expansion of your business
  • Sell excess production capacity
  • Maintain cost competitiveness in your domestic market

Disadvantages to keep in mind:

  • You may need to wait for long-term gains
  • Hire staff or Consultant to launch international trading
  • Modify your product or packaging
  • Develop new promotional material
  • Incur added administrative costs
  • Dedicate personnel/Consultant for traveling
  • Deal with special licenses and regulations
  • Initial Language and Culture Barrier
 

Common Export Mistakes

               

 

1. Failure to obtain qualified export counseling and to develop a master international marketing plan before starting an export business.

A: Obtain Export Counseling

2. Insufficient commitment by top management to exporting.

A:Determine Export Readiness

3. Failure to have a solid agent/distributor’s agreement

A:Understand Agent/Distributor Contracts

4. Blindly chasing “E-orders” from around the world.

A: Avoid Accidental Exporting

5. Failure to understand the connection between country risk and securing export financing.

A: Understand Export Financing

6. Failure to understand Intellectual Property Rights

A: Understand Intellectual Property Rights (IPR)

7. Insufficient attention to marketing and advertising requirements.

A: Pay Attention to Overseas Marketing and Advertising

8 . Lack of attention to product preparation needs

A: Pay Attention to Product Preparation Requirements

9. Failure to consider legal aspects of going global.

A: Understand Licensing and Joint Ventures

10. Failure to know the rules of trade.

A: Understand Export Regulations