American manufacturers rank among the world’s best, thanks to rigorous management, world-class efficiency, and scientific approaches to operations. Sometimes the attention that goes into the product and process distracts from another huge advantage manufacturers may not realize: a “Made in America” label.
This is a highly-valued label for many products in many markets around the world, and it offers extra incentive for U.S. small and mid-sized manufacturers to export. But many hesitate to undertake an export program because they’ve heard it’s too risky or complicated. In fact, less than 1 percent of all small businesses, and only 5 percent of middle market companies export their goods and services, according to the Middle Market Power Index: Taking the Global Stage from American Express and Dun & Bradstreet.
This hesitation can be costly in terms of lost revenue and profit; not to mention exporting has generally become less complicated than it’s traditionally been perceived.
The following four tips can help manufacturers capture buyers who value products that are “Made in the USA” and create additional value for their businesses at the same time.
No. 1 – Help the buyers find you
Many companies wonder whether there’s actually a market for their products or services. Finding the answer is more accessible than ever before. Companies used to need to do a lot of research, select a promising target market, and then commit resources (including management’s time and focus), often for years, to try to build awareness and develop a market. That was risky.
Today, the same digital marketing techniques that companies rely on to generate domestic leads can simultaneously generate international leads as well. The data you generate online can help confirm your market opportunities and highlight attractive markets with demand. By investing in more digital marketing to make it easier for your international buyers to find you, selling globally becomes a lot less daunting.
No. 2 – Export your way to growth capital
Many growing manufacturers struggle with financing challenges. With slow payments from customers and vendors and employees requiring prompt payment, even profitable businesses encounter working capital constraints.
Exporting can offer appealing solutions to working capital challenges through various government guaranteed programs, which are designed to encourage international sales growth. Local SBA and USEAC offices are good starting points to learn about these programs. Financial institutions also offer extensive business financing solutions that can help secure funding for doing more business overseas.
No. 3 – Diversify your way to greater stability
Manufacturing tends to be cyclical. The good times are great, but the slow times can be a drag. U.S. Small Business Administration research reveals some interesting detail on this topic. Companies that export tend to pay higher wages and are more resilient, because diverse global sales can help smooth revenue cycles.
No. 4 – Find new employees and market opportunities
Wait! There’s more!
Many manufacturers are challenged to recruit, hire and retain top employees. Many millennials value global activity and engagement, and companies that are active internationally may have an edge.
Product roadmap and innovation are also high priorities. And many companies that export discover new learnings for the domestic market as they watch international buyers use their products in creative new ways. I’ve seen companies open entirely new vertical markets this way — without any expensive investment in research and development.
Seize the opportunity
You’ve got great products — and in many cases a great sales advantage for buyers that value “Made in the USA.” Not only is exporting doable with many resources available to help your business assess its strategy, but exporting can also offer additional benefits to your business beyond revenue and profit.
Ed Marsh is the exporting advisor to American Express Grow Global.