Novel Ways to Solve Exporting Riddles for Small Businesses

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Patrick Clark, Bloomberg BusinessWeek

 

About two-thirds of small businesses that don’t export goods or services would like to start selling overseas, according to a June study (PDF) from the National Small Business Association (NSBA). Almost half of thosebusinesses said a main barrier is that they’re “not sure where to start.” Given President Barack Obama’s promise in 2010 to double exports by 2015, helping would-be exporters navigate the many federal agencies that offer resources to promote foreign trade seems like a good idea.

It would be easier if federal officials themselves could keep track of the resources on offer. But according to a Government Accountability Office report this week, the interagency Trade Promotion Coordinating Committee (TPCC), created to track the resources the government devotes to boosting exports, doesn’t give lawmakers or officials “information that provides a clear understanding of how resources are currently allocated.”

That makes it hard for the government to determine whether the billions it spends to promote trade are being spent efficiently. The TPCC responded in a letter to the GAO that it has “limited authority” over the information that agencies report.

The GAO undertook the study at the request of Representative Sam Graves (R-Mo.), chairman of the House Small Business Committee, who has advocated for streamlining export programs. In May, Gravesintroduced legislation intended to improve coordination between agencies that promote foreign trade. The idea: Cut back resources devoted to helping small businesses export and boost foreign sales as a result. In June, Graves championed free-trade agreements as a means of improving small businesses’ access to foreign markets.

“There are over 20 federal agencies that provide some, or all, of the steps in the export process,” Graves said in a statement on the GAO report. “This can paint a very confusing and intimidating picture for small companies who often don’t have designated export officials or trade representatives on staff to navigate the process for their businesses.”

U.S. exports reached a record $191 billion in June, according to the Department of Commerce. The U.S. Census Bureau says small businesses account for a thirdof foreign sales.

Navigating the maze of government resources isn’t the only challenge for small business owners hoping to begin exporting. Twenty-six percent of respondents in the NSBA survey said they don’t export because they worry about getting paid by overseas customers, and another 14 percent cited the problem of getting financing for foreign customers. A paper (PDF) from the Small Business Administration Office of Advocacy earlier this year suggested that making working capital loans more obtainable for small businesses could also boost exports.

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Clark is a reporter for Bloomberg Businessweek covering small business and entrepreneurship.
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About Alexander Gordin
An international merchant banking professional with over twenty years of business operating and advisory experience in the areas of export finance, international project finance, risk mitigation and cross-border business development. Clients include foreign governments, municipalities and state enterprises as well as Fortune 500 and small/medium enterprises. Strong entrepreneurial instincts, combined with leadership and strategic skills. Transactional and negotiations experience in over thirty five countries. Author of the highly acclaimed "Fluent in Foreign Business" book and creator of the "Fluent in OPIC", "Fluent in EXIM","Fluent In Foreign Franchising", "Fluent in FCPA",and "Fluent in USTDA" seminar/webinar series. Currently developing "Fluent In ......" seminars and publications. Co-author of the Fi3 Country Business Appeal Indices. Extensive international business development and project finance transaction experience in healthcare, aerospace, ICT, conventional and alternative energy infrastructure, distribution and hospitality industries. Experience managing international public and private corporations. Co-Founded three companies abroad. Strong Emerging and Frontier Market expertise. Published and featured in numerous publications including: The Wall Street Journal, Knowledge@Wharton, NBC.com, The Chicago Tribune, Industry Week, Industry Today, Business Finance, Wharton Magazine Blog, NY Enterprise Report, Success magazine, Kyiv Post and on a number of radio and television programs including: Voice of America, CNBC, CNNfn, and Bloomberg. Frequent speaker on strategy, cross-border finance and international business development. Executive MBA from the Wharton School at the University of Pennsylvania. B.S. in Management of Information Systems from the Polytechnic Institute of NYU. Specialties Strategic Management Advisory, Export Finance, International Project Finance & Risk Management, Cross-border Negotiations, Structured Finance transactions, Senior Government and Corporate officials liason

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