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Mon, Sept. 23

Small businesses can succeed in international markets

Question: I've successfully built my business and am considering expanding into the international market. Would SCORE give me some input on this as a possibility for a small business? Could this become profitable?

Answer: You want to know if your next market opportunity for your small business might be overseas. Actually, two-thirds of the world's purchasing power is outside the U.S. Doing business overseas can provide a measure of insulation against fluctuations in domestic markets, and en-hance your overall competitiveness.

"Exporting is easier than we imagined," declares Joe Van Bourgondien, a long-time Prescott Resident who recently left Northern Arizona SCORE to work with a client that he helped successfully break into the international market.

Exports accounted for nearly 25 percent of U.S. economic growth during the past decade, and are expected to grow by nearly 10 percent per year for the next several years. More U.S. small- and medium-sized companies are exporting than ever before. The value of total goods and services grew almost 17 percent from 2009 to 2010 to more than $1.8 trillion. Today the value of total goods and services exported is estimated to be in excess of $2.6 trillion.

According to Trade.gov, exporting has many positive aspects:

• Access. Today, improvements in trade finance, the Internet, and trade agreements have dramatically increased access to markets worldwide. 

• Demand. More than 70 percent of the world's purchasing power is located outside of the United States. Your competitors are increasing their global market share, and you can too.

• Profitability. Exporting can be profitable for businesses of all sizes. On average, sales grow faster, more jobs are created, and employees earn more than in non-exporting firms.

• Competitive advantage. The United States is known throughout the world for high-quality, innovative goods and services, customer service, and sound business practices.

• Risk mitigation. Most companies that export have an easier time riding out fluctuations in the U.S. economy and are more likely to stay in business.

"Exporting is strategic in another way," states Van Bourgondien. "Ninety-five percent of the world's consumers live outside the United States. The World Bank reports that the number of people considered to be 'middle-class' will triple to 1.2 billion, enabling them to afford imported goods.

"Today, global business assumptions are changing. Assumptions like exporting is too risky, my products will not sell outside the U.S., getting paid is cumbersome, et cetera, are changing due to the global economy in which all businesses compete."

Van Bourgondien notes that export assistance is now available to the small business owner: "There are U.S. Export Assistance Centers located in Phoenix, Scottsdale and Tucson. These centers are supported by five federal agencies and serve as one-stop shops that provide small- and medium-sized business with hands-on export marketing and trade finance support."

In Northern Arizona, support is available from organizations like SCORE, SBDC (Small Business Development Center) and Yavapai College. At the state level, Arizona has a very aggressive export support program. The Arizona Commerce Authority in conjunction with the U.S. Commercial Service provides training, market research and financial support for small businesses interested in developing their export activities. Visit www.azcommerce.com or www.export.gov, or call the Trade information Center at (800)-872-8723 for more information.

SCORE's business plan workshop is five Wednesdays, Jan. 14 - Feb 11. Cost: $90 for two people from the same business. Go to http://northernarizona.score.org/localworkshops, call 928-778-7438 or email scoreoffice@scorenaz.org.

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