Top 10 Reasons to Export

Selling abroad could significantly benefit your company. Here are our top 10 reasons why your company should explore international markets: 

1. Create a Competitive Advantage: Companies that export have several competitive advantages. The U.S. is known the world over for its high-quality goods and services, customer service, and ethical business practices. This reputation can help an American SME (small-to-medium-sized enterprise) compete over foreign competitors. Domestically, exporters also have an advantage over their domestic-only counterparts because they have a larger customer base, increased revenue, more productive workers, and higher levels of innovation. Lastly, a company that exports will receive higher valuations when selling. This is due to spreading risk across markets, enjoying higher margins, and seeing more profitability than non-exporting companies.
2. Expand Customer Base: An SME that exports opens itself to a world of customers and potential profits. With more than 95% of the world’s population and 84% of spending power outside the U.S., exporting both expands and diversifies a company’s customer base.
3. Maximize Revenue: SMEs exporting to Canada average an additional $624,000 per year in revenue and those exporting to Mexico average $1.4 million per year in additional revenue. With 190 other UN-recognized countries in the world, there are ample opportunities for companies to take advantage of additional revenue sources.
4. Reduce Risk: By lessening a company’s reliance on a single market, exporting helps to reduce risk. Although exporting carries its own risks, companies that export can more easily ride out downturns of the U.S. economy because they have revenue streams abroad. The risks involved in international sales have lessened over the years as more countries have taken steps to mitigate issues such as intellectual property theft, tariffs and duties, and other barriers to entry. Furthermore, a growing body of multilateral and bilateral trade agreements has made trade easier and safer for U.S. companies.
5. Enhance Worker Productivity: Worker productivity typically increases significantly when companies export. In a 2010 study, the U.S. Trade Commission found that labor productivity (measured as revenue per employee) was 70% greater for exporting manufacturers than non-exporting companies. In addition, exporting companies tend to be able to offer employees higher wages.
6. Boost Innovation: A study by the University of Southern California and the University of Minnesota found that exporters file seven times more patents and create four times more productive innovations than non-exporters. This innovation occurred quickly – within two years of starting to export. Why? Exporters have more opportunities to learn from diverse ideas and see opportunities from experiences abroad.
7. Grow Faster: The U.S. International Trade Commission found exporters outperform their non-exporting counterparts in total revenue, revenue growth, and higher labor productivity. According to the U.S. Census Bureau, exporting manufacturers with 250 or fewer employees had almost two times more revenue than non-exporting companies. Exporting tends to correlate with greater revenue and faster growth.
8. See New Horizons: Exporting provides opportunities to travel, learn about new cultures, grow professional networks, and gain new perspectives. Exposure to diverse ideas leads to innovation, and exposure to new international networks inevitably leads to more opportunities to reach customers and to better understand how to become competitive in new cultures. For some SME owners or employees, exporting may be a first opportunity to see the world outside our borders – and on a personal and professional level, this is an invaluable experience on its own.
9. Increase Job Opportunities: As revenue increases from international sales, companies expand their operations domestically and abroad. To produce more product to send overseas, companies generally hire more workers. Companies are also likely to hire staff directly related to international sales.
10. Contribute to U.S. Economic Growth: Exporting contributes to our nation’s overall economic growth. While there are economic reasons for why the U.S. imports more than we export, adding to our export growth directly leads to the growth of our Gross Domestic Product and the health of our economy. SMEs can play an important role in bridging the export-import gap as they have the largest opportunity for potential growth.