Bodybuilding.com bills itself as the Internet's most visited fitness site. Some 32mm people reportedly visit the site each month for "how to" videos on pumping iron, customized fitness plans and nutritional supplements. As Bodybuilding.com launches their 9th annual spokesmodel contest, we recognize that "bulking up" is very profitable indeed. These days, small businesses are also "bulking up" by looking overseas.
When we think of US exports, the image that typically comes to mind is that of a global corporation exporting something like tractors, farm goods or technology. Historically, international trade has been a business reserved for the big boys, with the scale and expertise to do business overseas. Times have changed.
In fact, small businesses play a sizeable and growing role in US exports. According to the National Small Business Association (NSBA), it is very substantial indeed. Citing data from the International Trade Administration, the NSBA finds small business exporting firms account for 98% of all exporting firms and 34% of US exporting value. Further, 58% of respondents say they have exported goods and/or services, and nearly 50% of those who haven't, said they would be interested in doing so. Some surprises from this survey were that almost 50% of the respondents said that their export deals take only "a little time" (a few weeks) to set up, and 61% found that financing for exporting is "no more difficult to get" than for domestic operations. This demonstrates that there is a great opportunity for community banks here to expand and enhance profitability with small business customers.
Of course, there are things to consider here as well. For instance, global market uncertainties affect export sales and the international regulatory environment can be difficult to navigate for some. That being said, as more small businesses make the international leap, these concerns can be mitigated.
For those taking on some of the issues around exporting, the rewards can be significant. Increased growth from additional markets helps many small businesses survive and even thrive. Here, consider a recent story in the Orange County Register that highlighted a local nutrition bar company. It had turned to exporting because of increasing domestic competition and today boasts customers in more than 20 countries. As a result, exports now account for about a 25% of company sales.
The growth in exporting is affecting many industries. However, the service industry is one of the fastest rising areas due to technological advancements. If you have small business customers who offer services in areas such as e-business, IT, education, tourism, environment or engineering - they most likely have thought about exporting if they don't already.
As small businesses grow through exports, your bank can grow in lockstep. Your customers may turn to you for guidance in the international arena, so being prepared for such discussions is another key step to consider.
Being an international business resource for your small business customers can serve to enhance the business relationship, as well as encourage greater loyalty. By working together, both small businesses and community banks can leverage new sources of growth and value in the exporting game. That should get everyone pumped up!