APICS is the premier professional association for supply chain management.

Testing the Waters

By Dave Turbide, CFPIM, CIRM, CSCP, CMfgE | March/April 2012 | 22 | 2

Why you should take a close look at exports

The largest companies are global, and they rely on doing business in multiple geographies to support their operations and growth. Smaller businesses, however, often will limit themselves to their local regions because exporting seems daunting. Certainly there are hurdles to exporting, but a great deal of help also is available.

In the current economy, developed areas such as the United States and Europe are in the middle of an extended recession, and markets are flat or worse. Developing economies are still growing, however; in fact, they are building a large industrial market and a middle class hungry for Western goods. While the United States still is the world’s leading economy, other regions are catching up, collectively offering a growing opportunity for companies ready to consider exporting their products.

Overall, exports are up. The US Department of Commerce reported a 12.3 percent increase from October 2010 to October 2011—a total of $19.7 billion. Smaller companies already are participating in this growth: According to the US Small Business Administration, 70 percent of US exporters have fewer than 20 employees.

While in recent years the weak dollar provided a boost to exporting by making US products less expensive in other areas, current global trends are taking away some of that advantage. As Europe’s financial troubles become more evident, investors are coming back to the US dollar as a safe investment, raising its value relative to the euro and other currencies. US products might be more expensive, but it doesn’t mean they lose their attractiveness to other markets. Manufacturers in the United States maintain a strong reputation for quality goods, as well as innovative designs and technology. Exporters will tell you that US products can compete effectively—even if currency fluctuations don’t favor US goods as much as they have in recent times.

Where to get help

There are a number of resources available to small- and medium-sized businesses that want to explore the possibilities of exporting. The US Department of Commerce runs an export assistance center in conjunction with other government departments, including state, agriculture, energy, and treasury. The website export.gov, managed by the International Trade Administration, is a clearinghouse of information regarding exporting. It should be the first stop for anyone who wants to learn more about exporting and might need a little assistance getting started.

Numerous states have export—sometimes referred to as international trade—assistance resources, many of which are affiliated with state universities. The export assistance center in my own state of New Hampshire promises to help “identify and evaluate international partners, navigate international documentation challenges, create market entry strategies, and [provide] other export-related guidance.” The US Small Business Administration also manages export assistance centers located in several metropolitan areas in the United States. Locations, contact information, and more can be found at sba.gov under the heading Counseling and Training.

The US Export-Import Bank provides financial assistance specifically to encourage small businesses in their efforts to market products overseas. The bank’s chair, Fred Hochberg, has stated that more than $6 billion of the $32 billion the bank provided in export financing last year through September 2011 went to small businesses. The bank intends to continue to increase working capital guarantees, export-import insurance, and supply chain financing to small businesses.

Follow the money

For those individuals running small businesses and looking to expand their markets, there should be few reasons not to consider exporting goods overseas. Help is readily available if you know where to look. And the incentive to do so is simple and straightforward.

According to legend, when asked why he robbed banks, renowned criminal Willie Sutton responded, “Because that’s where the money is.” Why look into exporting? Because that’s where the customers are.

Dave Turbide, CFPIM, CIRM, CSCP, CMfgE is a New Hampshire-based independent consultant and freelance writer, and president of the APICS Granite State chapter. He can be reached at dave@daveturbide.com.

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