Wyoming Business Tips for June 26

A weekly look at Wyoming business questions from the Wyoming Small Business Development Center (WSBDC), part of WyomingEntrepreneur.Biz, a collection of business assistance programs at the University of Wyoming.

By John Privette, regional director, WSBDC Network

“My business has been approached by a Canadian company to export our product. I’ve read that exporting is risky business. Is that true?” Howard, Lingle

The Small Business Exporters Association recently released its 2016 Small Business Exporting Survey. The survey, conducted Feb. 22-March 14, 2016, compiled feedback from 530 small-business owners, 58 percent of whom had some experience in selling merchandise or services to customers outside the U.S. The survey shed some light on four common myths about exporting:

-- My business isn’t large enough to export.                                                                                  

The survey reports that 62 percent of small businesses that export have fewer than 10 employees, and 40 percent reported revenues less than $1 million. According to the International Trade Administration, small-business exporters with fewer than 20 employees account for 76 percent of all exporting firms. An assessment of export readiness is an important first step to deciding whether or not to export. The WSBDC Network can assist in this determination.  

-- Exporting is too risky.

For Wyoming, Canada is the largest export market and is no riskier than selling in the United States. The survey listed Canada, Mexico and the U.K. as the top three export markets. Regardless of the export market, much of the export risk can be identified through assistance available through the WSBDC Network and the U.S. Commerce Department, Export Assistance Center.

-- Getting paid is worrisome.                                             

Getting paid is a significant concern with small-business exporters. This may explain why 66 percent of survey respondents require payment in advance of shipment. However, export trade finance and banking have developed to the point where selling on open account or under a bank-issued letter of credit is routine. The WSBDC Network can assist in the determination of appropriate payment terms and ways to reduce nonpayment risk. 

-- Exporting is too complicated.                                                                                

Exporting is not that easy, but it is not that difficult. Developing export markets does require a commitment of time and resources, as does developing a domestic market. Nearly half of the small business firms surveyed spend a few months or more preparing to export. Regardless, the majority of the small exporting firms enter new foreign markets to take advantage of sales and/or profit opportunities and rely mostly on freight forwarders, government resources and customs brokers to assist with export-related challenges. 

Exporting provides market expansion opportunities that may fit very well with your business and products. Give the WSBDC Network a call for assistance in determining your firm’s export readiness.

A blog version of this article and an opportunity to post comments are available at www.wyen.biz/blog1/.

The WSBDC is a partnership of the U.S. Small Business Administration, the Wyoming Business Council and the University of Wyoming. To ask a question, call 1-800-348-5194, email wsbdc@uwyo.edu, or write 1000 E. University Ave., Dept. 3922, Laramie, WY, 82071-3922.