I talk to business executives weekly that have an opportunity to sell a product or service overseas. The executives are divided into one of two camps. Either they fall for some “too good to be true” proposition (in Nigeria or Mexico), or they have no idea how to determine if the opportunity is real or is a waste of time and money. Global expansion is possible for every company of any size. There are many resources available to help and businesses owners should not let fear stand in the way of increasing profits through international business opportunities. Since 2009, U.S. exports to the western hemisphere have jumped an amazing 49%. Everyone can do it. I find that many business owners are afraid because they don’t know where to begin.
One new government resource is the new Small Business Network of the Americas or SBNA. The White House announced this new initiative on April 13. See the White House fact sheet here. The SBNA’s prerogative is to promote job growth and encourage trade throughout the western hemisphere through small and medium-sized enterprises (SME). The SBNA plans to “expand the pool of available resources for business development, enhance access to business counseling services for entrepreneurs, and foster SME growth by providing a framework to connect businesses across the hemisphere.” This plan includes:
- Expanding and connecting the already existing Small Business Development Center (SBDC) model — which partners the government with universities to provide free education and low cost training to small businesses — to other countries in the western hemisphere. The Small Business Administration administers the SBDC program which includes services like individualized long-term business counseling and market research. Currently there are almost 1,000 SBDCs in the U.S., 104 offices in Mexico and 10 offices in El Salvador. (Don’t ask me why we started here first.) For more information, look over the U.S. Small Business Administration SBDC page located here.
- Using U.S. Export Assistance Centers (USEACs) in our overseas Embassies to provide international business partner matchmaking and referrals to SBDC clients. While these services are already offered at a cost to larger businesses, hopefully the initiative will provide assistance to SME for free or at a reduced cost through their local SBDC.
- Expanding websites and online tools like SBDCGlobal.com that provide SME support. For example, SBDCGlobal.com provides information on international buyers and sellers and provides opportunities to promote products.
- Increasing U.S. Government financial support with more working capital grants, Overseas Private Investment Corporation (OPIC) financing, loan guarantees, and private sector lending. The specifics of these programs have not been announced yet, so the particular lenders and application processes are still unknown. However, it is clear that some of these opportunities will be focused on and available solely for business development in the Americas.
Great words from our President, but what will really change? How many new offices will be opened to assist exporters? What are the criteria for obtaining the loans and guarantees? Unfortunately, I don’t know. However, I can say there are ways to use government resources to explore international opportunities right now. We use the U.S. Commercial Service all the time to help small, mid-size, and even large U.S. businesses. We get reports on foreign companies and names of potential companies that might make good business partners. We also coordinate due diligence efforts with U.S. consulates abroad. Some of this is free, some of this costs several hundred dollars, but it is a good investment. If you are going to export or set up a sales agent or distribution network, you must start by finding the right partner and performing due diligence. Such due diligence protects you from a violation of U.S. law — the Foreign Corrupt Practices Act and export control laws come to mind — and will give you substantive information to determine if this company is a good fit for your growth strategy and is a knowledgeable partner in your industry. This is step one for a global strategic plan.