Small Businesses Can Explore Ways to Grow Globally

By: Niyonsaba Magnifique

The Office of Business Opportunity is committed to assisting small businesses grow domestically and internationally. As a part of OBO’s annual resources forum on exporting, on Oct. 20th, OBO partnered with the Small Business Administration (SBA) to host a webinar that covered the basics of exporting and international trade. Featuring guest speaker Sonia Maldonado, district inter-national trade officer of the SBA, the webinar aimed to equip small business entrepreneurs with knowledge about how to export their products and services to other countries, how to expand their markets, and how to increase sales and profitability.

According to the SBA, two-thirds of the world’s purchasing power is in foreign countries, and there are many resources that help small business owners to expand their businesses globally. These resources help assess a company’s readiness to export, assist with creating exporting business plans, and provide guidance on how to obtain funding and exporting licenses.

If a company wants to grow internationally, one of the first steps is to assess its viability as expansion to a global market should not negatively affect the performance of the domestic business. The International Trade Administration provides an online assessment tool for business owners to determine if they are ready to start exporting. The free resource can be found by visiting www.trade.gov/exporter-assessments.

Once a business owner determines that their company is equipped to start exporting, Maldonado recommends that “they do their homework” and create an exporting business plan that outlines where and how they will export. For help in this area, there are many organizations that offer business coaching and training on exporting strategies. In Houston, some of these organizations include SCORE Houston, the University of Houston, Small Business Development Center, and Women's Business Business Enterprise Alliance. These entities have business advisors that offer one-on-one mentoring sessions to help small business owners prepare to export strategically.

When it comes to selecting a country to export to, Ms. Maldonado, said business owners can invest in conducting foreign market research. The U.S. Commercial Service, the trade promotion arm of the U.S. Department of Commerce’s International Trade Administration, assists business owners in conducting foreign market research in specific countries and industries. Although there is a fee associated with the service, Maldonado advised small business owners to treat it as an investment that is going to yield returns.

Just as it takes money to start a business domestically, funding is also needed to expand globally. The SBA has export loan programs in place such as the Export Working Capital, International Trade Loan (ITL), and Export Express. Although the SBA does not lend money directly, it works with banks and offer guarantees on the loans, which helps small business owners secure the loans.

As small business owners seek funding, it is important for them to research lenders that can best meet their needs. Lenders have varying requirements, such as minimum and maximum loan amounts, loan maturity, credit score, collateral, and the number of years the business has been in existence. To find a list of SBA lenders, go to page 30 of OBO's Small Business Resource Guide which can be found at www.houstontx. gov/obo.

In addition, business owners need to obtain proper exporting licenses to export legally. To apply for export licenses, they can visit www.trade.gov/obtaining-export-license. To avoid penalties, obtaining proper exporting licenses is essential.

When businesses can successfully navigate global trade, they can reap the benefit of not having to depend on just the domestic market.