Cross-Border Trade Poised to Grow for Small Businesses

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HSBC has set aside U.S. $1 billion in loans for small and medium-sized businesses that are expanding internationally (China, Brazil and Hong Kong, for example).  To pre-qualify, you must run an established business that has annual revenue between $3 million and $500 million, but may or may not have dipped their toes into the international markets.

Head of HSBC's U.S. Business Banking Mark Luppi says the following:

"Based on the research we've done, 27% of small businesses are doing some sort of cross-border [transaction].  We expect that to grow to 40% over the next 12 to 24 months."

Read entire article here.

Look Who's Entering Global Markets!

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According to the U.S. Department of Commerce, more than 70 percent of the world's purchasing power is outside of the United States.

So, what are you waiting for?  Small Business:  Getting Into Global Markets says, "if your business isn't taking advantage of global markets, you could be missing out on some big opportunities."

Read the entire article here (and we are delighted to be quoted).  Hat tip to author Jamie Herzlich.

One Way to Expand a Small Business Is To Export

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More and more small businesses are positioning themselves to go global.

"According to small businesses, the only way a business can expand is to export," said trade consultant Al Elgendy at a recent San Bernardino Economic Development Agency workshop for entrepreneurs looking to expand globally, as quoted by the Inland Valley Daily Bulletin. "It reduces the dependency on the domestic economy. When there's a downturn in the economy, the only way to expand is to go global."

Read more here.

Thrive Baby, Thrive

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Tough times call for smart solutions and Intuit is offering a boatload of them over at its new Small Business United Blog. We reported about this in our Borderbuster e-newsletter on July 6th but just in case you are not a subscriber and missed it, we decided to re-feature the information here -- it's that important.

What's in it for you? Plenty. How will you find out? By a visit. Pull up a chair here.

Small Business Can Be Borderless

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Remember when E.F. Schumacher wrote the classic Small is Beautiful? I think about that all the time now with small businesses going global. One of Schumacher's philosophies was: "Why use the computer if you can make the calculation on the back of an envelope."

If he were to revise his book today, he might offer this: "Why remain local with a business if you can easily go global?"

Apparently Dan Brutto thinks along the same line with his commentary over at Forbes entitled, Small Business, Big World. which is about how international clients can keep a company buoyant in tough times.

Here's one of his comments:

Clearly, entrepreneurs are recognizing the benefits of trade, and we should do what we can to help them harness the power of trade to grow their businesses.

Do Small Business, Globally

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Ever wonder how can today’s harried entrepreneurs put up the kind of front that says, “We’re organized, we’re professional and we compete on a global level?” Me too.

Apparently virtual home office phone service provider toktumi has the answer and they are poised to change the way we do small business, globally.

Next-Gen Artisans Fuel New Entrepreneurial Economy

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Another one of my favorite reports has just been released: The third installment of the Intuit Future of Small Business Report™, which looks ahead 10 years and examines the prospects, influences and profiles of small business. The report is sponsored by Intuit Inc. and authored by the Institute for the Future.

Check this out:

The Next Wave of Globalization Will be Driven by Small Business

The number of U.S. small businesses trading globally will substantially increase, fueled by cross-border business opportunities, technological advances leading to broader social networks, and reductions in export costs. More specifically:

• Almost half of U.S. small businesses will be involved in global trade by 2018. As the costs associated with doing business globally continue to decrease, small businesses will make no distinction between domestic and international commerce.

• Social networks will fuel borderless commerce. Online and offline social networks will help remove soft trade barriers, such as language and cultural differences. These networks will introduce small businesses to new markets and facilitate cross-border trade.

• Globalization will increase small business diversity and amplify its economic value. Small business diversity will help increase market growth in the U.S. and abroad and will unlock new opportunities for all small business owners.

Clearly, borderless business is going to become BIG.

Special kudos to the main authors of the report: Steve King, Anthony Townsend, and Carolyn Ockels who also, in addition to writing the Intuit report, publish a nifty blog at Small Business Labs.

For a shortcut to the report, visit here and look for Phase Three: The New Entrepreneurial Economy.

Note: We contributed a tad to the report.

6 Questions For Your Global Shipper

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I wrote an article, "Leaving the Country" for PARCEL magazine that talks about the reluctance of small businesses to expand their businesses internationally and why. One of the key concerns that always rises to the top of the heap is: "How will I ship my product? I'm clueless."

That issue is addressed near the end of the article with six questions small businesses should ask to help find the right shipping partner.

No. 1: Are you familiar with my industry and the markets where I want to do business?

The article along with the other five questions can be found here.

Gear Up For Globalization: Answers From Real People (#3)

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Question from:

Laurel Delaney, Founder and President, GlobeTrade:

"Do you think Ex-Im Bank will cut back or be more willing to extend loans to SMEs (that qualify on exports) this year in light of a possible recession?"

Answer from:

Tess Morrison, Director, Illinois International Trade Center, University of Illinois, College of Business, Champaign, Illinois.

"Exim (and SBA) will not cut back for SMEs, whether or not there is a recession. Exim is committed to serving at least 20% of their business as SMEs.

All companies need to adhere to the financial guidelines, but they have as much to do with the buyers as the sellers. Exim must (by law) act as a bank. For example, they can only do business where there is a reasonable expectation of repayment. The onus is on the buyer. Otherwise, we, the U.S. taxpayer has to pick up the slack. Exim looks at the seller to make certain that they do not appear about to go under (to give an excuse to not repay by the buyer.) Exim is committed to SMEs."

Delaney (clarification):

"So Exim will not be in the same league as all the other banks on being super cautious with loans to SMEs due to the mortgage meltdown?"

Morrison:

"That's correct. They don't do the same kind of lending as regular banks. Their focus is on the buyer being able to repay so that we the U.S. taxpayer isn't stuck with the repayment."

Note: I am still waiting to hear back from two other experts (one from Chicago and one from headquarter office) at Exim Bank on the same question.

Weak Dollar Has Small Businesses Thinking Globally

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The New York Times now reports on how the weak dollar has small businesses thinking globally. If you make your products in the U.S.A., think exports.

A hat tip to friend and colleague John Yunker at the Global By Design blog for the nudge.

Up next: Another guest expert weighs in with her comments about the 'R' word tomorrow. Stay tuned.

Exporting Is a Big Step

By Steve Strauss, Special for USA TODAY

Q: What do you think of exporting? Generally, is it a good idea for a small business? How difficult is it to get started? How expensive? Lots of questions. Thanks. — Maggie

A: First, we need to define exactly what you mean by "exporting" because the Internet has changed it, along with just about everything else. You see, today it is much easier than ever before to sell your products to an international audience — via your website — but that differs than traditional exporting wherein you find partners and distributors overseas who agree to represent you and sell your wares.

When it comes to the traditional idea of exporting, you are looking at the proverbial good news and bad news. First the pros ...

If you want a shortcut to finding an Export Assistance Center in your area, go here instead of downloading, as Steve suggested, a PDF file.

Export-Import Bank of the United States

If you have never explored the Export-Import Bank's site, kick back, relax and do it now. They have everything from conference news (click on What's New) to small business export financing help to key market guides. It's worth a visit.