Parcel - February 2008 - (Page 24) management LEAVING THE COUNTRY A stay-at-home mentality is curbing small businesses’ growth prospects By Laurel Delaney Why the Reluctance? The UPS Business Monitor reveals that small businesses are less likely to go global for several reasons, including a perception that international business is too risky, a lack of knowledge about international markets and unfamiliarity with customs regulations. Robert Johnson, International Business Manager of Norcross, Georgia–based Micromeritics Instruments Corporation, explains, “The size of the US market allows many small businesses to make a good living without looking beyond [its] borders. As a result, companies wait too long before looking at the potential international markets for their products.” S mall businesses play a big role in global trade. According to the U.S. Small Business Administration, small business exporters have historically generated approximately 29% of the US export sales in a given year, and in 2005, they accounted for nearly $300 billion of the $906 billion generated by all US exporters. Why Bother Going Global? But despite these healthy numbers, small- and mid-sized enterprises (SMEs) have not yet realized their global trade potential — and confusion about handling international shipping may be one reason why. The recent UPS Business Monitor United States survey found that most SMEs have failed to explore sales opportunities outside the United States for a myriad of reasons, including not understanding customs regulations. How extreme is the unwillingness of small businesses to go global? Of the 600 interviewees surveyed in the Business Monitor, a whopping 67% indicate they do not participate in any global trade. Not surprisingly, however, the larger the company, the more likely it is to trade globally. For example, 23% of small businesses with revenues of $20 million to $50 million sell internationally, compared to 11% of companies with revenues between $250,000 and $1 million. Among small business decision-makers who either import and/or export, Canada and Mexico are seen to be the countries with the greatest opportunities, according to the Business Monitor. India and Russia offer the least potential for global growth, survey respondents say. 24 February 2008 Small businesses that don’t consider going global stand to dull their competitive edges. Going global is an essential way for SMEs to: find new customers; increase sales; generate economies of scale; raise profitability; insulate seasonal domestic sales; create jobs, productivity growth and wealth; encourage the exchange of views, ideas and information. “Our decision to trade globally was initially due to customer demand,” Johnson says. “Not simply content with selling to those international customers who sought us out, we established an international sales department staffed by one person and one assistant within a few years after we made our first exports. After we developed an international sales plan and executed it, our export sales grew steadily. We now enjoy international revenues which represent approximately 70% of our total business.” One common question that I often hear small business owners ask is, “How do I handle my international shipping?” My advice is to choose a good shipping partner. While business owners certainly don’t have to become shipping or customs experts, there are some general things they should know they can expect from a good shipper. These are some key questions that small businesses can ask to help them find the right shipping partner. www.PARCELindustry.com http://www.PARCELindustry.com
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