The Small Business Administration is asking small business owners “where will your next customer come from?” AAC Enterprises, Inc. is finding them all over the world.  Justin Hartenstein started out selling automobile parts out of his garage, and now he designs and develops innovative custom lighting systems for car enthusiasts all around the globe.

Justin uses UPS TradeAbility® to obtain landed costs and UPS Paperless® invoice to electronically manage paperwork for international shipments, which make up about 20% of his sales.

Hartenstein entered SBA’s video contest and is sharing his exporting story.

If he wins – and I think he’s got a pretty good shot – he’ll win some cash and a trip to the National District Export Council Conference in Las Vegas. UPS is a sponsor of the November conference and plans to help other small businesses like AAC become more active in the global marketplace.

Boosting America’s exports strengthens our economic growth and supports millions of good, high-paying American jobs.  Although companies that export can make on average 9 to 12% more revenue than their peers, less than 1% of American companies sell their products in foreign markets.  Last year, President Obama recognized the importance of stimulating exports and set an aggressive goal of doubling U.S. exports in five years.  To achieve this goal, the President established the National Export Initiative. CEO Scott Davis was appointed to the President’s Export Council due to UPS’s ability to facilitate global supply chains for U.S. businesses.

Most business owners do not export because of a lack of knowledge and fear of the unknown.  To overcome these barriers and help companies expand globally, UPS is conducting a series of International Symposiums this fall. The next symposium in October will help small businesses develop an international expansion strategy.  Hear what participants had to say at a recent event held in downtown Los Angeles.

According to the 4th edition of the UPS Business Monitor Latin America, a common challenge identified by small to medium sized enterprises (SMEs) is a lack of access to capital financing for investments in their businesses. These investments can range from the hiring of more employees to purchasing specialized equipment, all under the objective of growing the business.

So what’s an SME with an eye on growth to do? UPS Capital®, the financial services arm of UPS, is expanding its Latin American network with the opening of new offices in Bogota, Colombia, and Lima, Peru. SMEs in both markets now have access to credit with very competitive terms and conditions for financing for the purchase of capital equipment through the use of Export Credit Agency guarantees.

Colombia and Peru join UPS Capital’s network in Argentina, Mexico and Brazil where the company has authorized more than 300 transactions to date, supporting customers with services that improve cash flows, risk management support for the protection of goods and payment acceleration and protection. Since 1996, UPS Capital has facilitated more than 700 loans in more than 30 different countries.

For businesses looking to purchase machinery, specialized equipment, parts and many other goods that will bolster their production or operational capacity, UPS Capital not only offers financing to provide this purchasing power but customers also can integrate UPS’s logistics for the movement of these goods.

So it’s clear UPS’s love for logistics goes beyond the moving your goods from one location to another – we also move your company from one level to the next!

A strong majority of Canadian business decision-makers say they would rather pay more money to buy materials from Canadian suppliers than source less expensive goods from overseas to widen profit margins.

The revelations come out of the third and final phase of a series of surveys conducted by Leger Marketing on behalf of UPS Canada that shows 63% of businesses would prefer to support their fellow domestic enterprises even if doing so means being less cost effective.

The numbers corroborate data from previous phases of the study that showed almost 40% of small to medium-sized enterprises (SMEs) believed they should confine their commerce within Canada in order to sustain the country’s currently strong level of competitiveness, and that 51% believe Canada should establish tariffs to discourage overseas exporters from accessing the Canadian market.

Pat Stanghieri, vice-president of marketing, UPS Canada, thinks this is cause for some concern. “While it is inspiring to see that Canadian businesses are so inclined to support their compatriots, it also is a bit of a red flag. The reality is that competing businesses based in other countries — including the United States — are leveraging the lower cost of goods and labour in emerging economies to achieve competitive price advantages.”

Specifically, the study found that the vast majority of all businesses — large and small — are unwilling to invest at all in internationalizing their businesses.

Stanghieri says this coincides with the results from the first two phases of the surveys conducted by Leger.  However, he was surprised to learn that 55% of decision-makers at large Canadian companies weren’t willing to make any investment at all into taking their company beyond Canada’s borders.  The survey showed that 43% of SMEs think global trade is something in which only large corporations engage.

When asked how Canada should counter the growing penetration of foreign companies into the Canadian market, 50% of big-business respondents (companies with at least 100 employees) said there should be more private and public investment in innovation to increase productivity. Meanwhile 27% of the big-business respondents said nothing should be done to counter the penetration of foreign companies into the Canadian market because foreign investment is a net benefit for Canadian business prospects.

While Canada’s trade deficit is the largest in a generation, respondents focus on manufacturing value-added and high-tech products to counter the traditional reliance on natural resources. Establishing more government-generated incentives to get business involved in trade was noted by the second highest number of respondents.

“It’s clear that for many businesses, going beyond Canada’s borders is unlikely unless there’s little financial risk on their part. Much of that stems from the common misperception that global trade is an expensive endeavour,” said Stanghieri. “The truth is global trade can be very affordable if businesses leverage already existing third-party supply chain infrastructure so that they don’t have to invest in their own.”

The Leger survey was conducted from Nov. 8 – 29, 2010, polling 300 businesses across Canada and across a variety of industries, including hospitality/tourism, construction and engineering, manufacturing, wholesale/retail, business/professional services, IT/communications and more. The study yields a maximum margin of error of +/- 5.7% 19 times out of 20.

UPS Chairman and CEO Scott Davis and Secretary of Commerce Gary Locke co-authored an opinion piece published by the U.S. Department of Commerce’s blog.

Robust and global trade drives the world’s economic engine. And it’s the quickest and surest way we know to accelerate economic growth, create new jobs and improve living standards. 

Now we freely admit that UPS has an interest here. At any given moment, UPS handles 6 percent of the U.S. GDP and moves 2 percent of the global GDP. So global trade is important to the future of UPS, and that holds true for its workers, and for workers across America. Every 22 packages per day that cross a border supports one job in UPS’s package operation.

That’s why UPS is so supportive of President Obama’s recent announcement of a landmark trade deal with South Korea, which is estimated to increase American economic output by more than the last nine trade agreements combined.

UPS’s logistics and lending services empower businesses of all sizes to export their goods and services virtually anywhere in the world, and with the impending passage of this agreement, there will be a lot more businesses to work with. 

The tariff reductions in this deal alone are expected to boost annual exports of American goods by up to $11 billion, supporting at least 70,000 Americans jobs. And an array of American industries will benefit from this deal.

The service sector is a great example – an area where America is a global leader. This agreement will open Korea’s $560 billion services market to more American companies, supporting additional jobs for American workers in sectors ranging from express delivery to engineering to legal and accounting services to education and health care.

American manufacturers and workers also will gain enhanced access to the Korean market and a level playing field to take advantage of that access. 

Under the agreement, Korea will immediately cut in half its tariffs on U.S. auto exports, creating more job-creating export opportunities for U.S. car and truck manufacturers and workers.

The National Association of Manufacturers reports that manufacturing exports to Korea supported 230,000 American jobs in 2008. The reduction of Korea’s tariffs on American manufactured goods is expected to boost this sector’s exports and related jobs even further.

And American farmers and ranchers could see their exports to Korea increase by as much as $1.8 billion every year under the U.S.-Korea trade agreement.

Agreements like this are a major step forward in efforts to create and support jobs for American workers and to ensure that the United States remains competitive in the 21st century.

In the months ahead, UPS will be working with the administration’s trade experts at USTR and the U.S. Commerce Department to ensure that U.S. businesses can reap the full benefits of this agreement.

This is a big win for the American economy, for American businesses and for its workers.

Did you know that 95% of the world’s consumers live outside the U.S., and yet only 3.9% of the 29 million small businesses in America are exporting? I spent several years at UPS working in our international operations and customs brokerage group, so I understand how a company that has never done business outside the U.S. might be intimidated by all the paperwork, customs regulations and other potential obstacles.

That’s one of the reasons UPS is hosting a special webcast at The New York Times on Wednesday, Nov. 10, at 12:00 p.m. EST. Titled “New Logistics & Exporting: How Your Business Can Benefit,” the webcast will offer insights and guidance for companies that are thinking about taking their business global.

The webcast will be moderated by Michael Rogers, author and “futurist in residence” at The New York Times. Serving on the speakers’ panel will be Matt Eckert, vice president of Hypoxico (a fascinating company that designs and manufactures high altitude training equipment); Daniel O’Brien, deputy national director of the U.S. and Foreign Commercial Service, and Dan Brutto, president of UPS International. The webinar is free.

Coming off the heels of the worst economic recession in decades, exporting is our best bet for producing new opportunities for growth and prosperity. The middle class in countries like India and China are growing fast and they’re becoming more affluent every year. They also have a strong desire for American products. But that won’t be of much benefit to U.S. businesses unless they’re willing to take that first step.

There is an incredible amount of information and support available to help even the smallest company reap the benefits of exporting, and the UPS webcast is a good place to get started. To register, visit newlogisticswebcast.com.

Lack of interest and investment despite countless opportunities overseas

Newly-released data shows that small to medium-sized enterprises (SMEs) are still hesitant to engage in international trade, despite the vast opportunities in the worldwide marketplace.

In part two of its three-part series to study SMEs’ global trade habits and attitudes, the survey, commissioned by UPS Canada, revealed that 52 per cent of SMEs would not take advantage of a free-trade deal with the EU — not because it’s with the EU, but because they have no interest in engaging in trade activity at all.

UPS Canada President Mike Tierney said the results are not surprising, but do present a concern about the future economic competitiveness of Canada’s businesses. “Given the turmoil taking place in the U.S. and European markets and much talk about the possibility of a double-dip recession, it’s understandable that many SMEs are reluctant to invest in expanding their enterprise beyond Canada,” said Tierney. “However, it’s very important that Canadian SMEs realize that in order to remain relevant and competitive in the future, they should leverage the economic opportunities emerging in overseas markets.”

Despite consistent encouragement to go global, the survey found that 61 per cent of SMEs would not be willing to invest – at all – to take their business beyond Canada. Just more than a quarter would only be willing to invest less than 20 per cent of their business capital.

In addition, almost 40 per cent of respondents believe that businesses should confine their commerce within Canada in order to sustain the country’s currently strong level of competitiveness. The numbers do not bode well for Canada’s growing trade deficit, which currently stands at record levels.

Tierney said he empathizes with the struggles that many businesses go through when it comes to expanding their businesses and notes that entrepreneurs are often discouraged from investing because they mistakenly believe they have to make massive investments into their own proprietary supply chain infrastructure.

“It’s important that SMEs understand that as Canadian businesses they are currently in a very competitive position to enter the global market,” said Tierney. “There are many organizations, such as UPS, that can provide resources to help them identify new, strategic markets, plan strong supply chains and realize cost efficiencies that will expand the profit margins of their global commerce.”

The survey was commissioned by UPS Canada and completed by Leger Marketing. It was conducted among a random sample of 300 small business respondents across Canada between August 31 and September 13, 2010. This method simulates a probability sample, which would yield a maximum margin of error of +\-5.7%, 19 times out of 20.

The full second survey is posted on the UPS Pressroom website. The first survey, conducted in June 2010, is also available. Stay tuned for survey three, which will be available in November.

If you talk with Mike McDonald, VP of Operations at Cleveland-based RAD-CON Inc., he would probably say that “E” also stands for Essential. International exporting has been essential to the industrial furnace supplier’s success. In fact, according to Christopher J. Messina, Vice President of Sales and Projects at RAD-CON, “We would have been out of business if it weren’t for exporting, or a much smaller company.” The U.S. Commercial Service reports that RAD-CON’s exports have increased by more than 45% since 2006. RAD-CON has recently been recognized as one of the top performers in U.S. exporting, receiving both the Ohio Governor’s E-Award and one of the most prestigious awards that the government affords to a U.S. business – the Presidential “E” Award.

Let me take a moment to throw out a couple of stats:

• According to the National Small Business Administration, 57% of small businesses in the U.S. would NOT export, even if their concerns about trade were addressed.
• If you’re not exporting, you are missing out on selling to 95% of the world’s consumers.
• Less than 1% of U.S. businesses export — the president’s goal is to double exports over the next five years.

So, given these facts and the struggling domestic economy, what are you waiting for? What is your excuse for not exporting?

This week, the Council of Smaller Enterprises (COSE), Northeast Ohio’s largest small business support organization, will hold its 5th annual COSE Small Business Conference at the Cleveland I-X Center. And by the way, RAD-CON happens to be a 28-year COSE member. 

At the conference, UPS will host the Growth through Global Trade Seminars on Thursday, October 21. Jim Beach and Chris Hanks, founders of theentrepreneurschool.com, will cover the basics of exporting, such as:

• Selecting an export market
• Choosing the right products to sell
• Finding safe and reputable foreign partners in your industry
• Maximizing your global sales 

Come and see how easy and profitable exporting can be for your business. Who knows? Maybe you’ll be a future ”E” Award winner.

UPS and World Trade 100 magazine want to recognize one U.S.-based small- to medium-sized business (SMB) that is using exporting as a competitive advantage. Through the Growth through Global Trade award, we are searching for an innovative company that has grown its global presence and connected with customers around the world.

The winning company will receive a feature story in World Trade 100 magazine and a custom-made plaque. Anyone can submit a nomination by completing the online form and writing a 200-word essay about the company’s global growth.

With the President’s National Export Initiative – which aims to double exports over the next five years – more small businesses should consider reaching out to new markets. Currently, less than 1% of the nation’s 30 million businesses export, despite the fact that 95% of the world’s consumers live beyond U.S. borders. What’s more, with a sluggish economy at home, exporting is even more important.

That’s because many countries around the world are emerging from the recession more rapidly than the United States, and now is the time for SMBs to take advantage of this trend.

For instance, many Asian markets are on the rise. Singapore’s GDP grew by nearly 20% in the second quarter of this year and China overtook Japan as the world’s second largest economy. Canada is another major market that has experienced growth. In the first quarter of 2010, Canada expanded at its fastest pace in a decade.

We hope that by sharing the winning company’s exporting success story, we can inspire more companies to pursue opportunities overseas. Here are some of my favorite examples of small businesses growing beyond U.S. borders:

Smartphone Experts was founded in 2002 in Diana Broesler’s backyard. While most people store gardening equipment in their backyard sheds, Diana was storing cell phone covers, chargers and other accessories. Eventually the Florida-based company budded from a backyard business into a global growth engine. Today Smartphone Experts sells its products in countries all over the world, including France, Australia and the UK.

Mercedes Electric Supply, a Florida-based distributor of electrical equipment, was founded by Mercedes and Vic LaPorta in 1979. The couple grew the business across the state, and eventually across the U.S., Caribbean and Latin America. New contracts with Burger King and the U.S. government will guarantee further global growth to Canada and the Middle East.

I’m looking forward to hearing new stories about entrepreneurs braving new markets. Submit a nomination for the Growth through Global Trade award or view more details online.

According to the National Small Business Administration, 57% of small businesses in the U.S.  would NOT export, even if their concerns about trade were addressed. What are they thinking? I’m not aware of anyone whose business is growing so fast in this economy that they can afford to ignore 95% of the world’s consumers! The New York Times reported recently that less than 1% of American companies export, despite the incredible opportunities for growth that exist beyond our borders. The crazy thing is, growing your business through international trade is not that difficult, and I can prove it!

My name is Jim Beach and I’m the head of theentrepreneurschool.com and former professor at Georgia State University. I, along with Chris Hanks, director of the entrepreneurship program at the University of Georgia, are going to conduct a new series of UPS-sponsored seminars around the country that are designed to help small businesses, or even those who want to start a new business, increase their sales by importing and exporting.

Between us, Chris and I have started 14 businesses in seven countries, including Argentina, Pakistan and Vietnam. We also have taught at the MBA level for 10 years each. Our “Growth through Global Trade” seminars are designed to teach you everything you need to know to successfully start and cultivate an international business. We will bring our strategy of low-risk entrepreneurship to these events, showing you how to find new opportunities for growth without risking your home or your health insurance. We also will be meeting with local business owners and budding entrepreneurs the evening before each seminar for free consulting and brainstorming sessions.

Chris and I are very excited to work with UPS to bring these seminars to Atlanta, San Jose, Providence, Dallas, Chicago, and Cleveland over the next several months.  Each seminar will cover the basics, such as: how to select an export market, how to choose the right products to sell, how to find safe and reputable foreign partners in your industry, and how to maximize your global sales. The central tenet of the seminars is that international trade may seem difficult, but it’s actually quite easy –  and, it can be immensely profitable! In fact, anyone can do it. The seminars will also cover international Web marketing and how to get listed number one on Google and other search engines.

The seminars will be four hours in length and they are absolutely free! Prestigious partners such as the Kellogg School of Management at Northwestern University, the University of Texas at Dallas, Bryant University in Rhode Island, the San Jose-Silicon Valley Chamber of Commerce, the Atlanta Chamber of Commerce, and the Cleveland Council of Smaller Enterprises will host the events. The Entrepreneur School and UPS greatly appreciate the help, sponsorship and commitment of these outstanding institutions to promote international trade.

To register for one of our seminars, please visit www.ups.com/seminar. And, if you’re interested in meeting with Chris and me for a free consultation before your chosen seminar, please drop me a line at James.beach@att.net.

Please watch this blog for future updates and tips on how to get your business ready for explosive growth through international trade!