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Expanding Overseas

Novel Ways to Solve Exporting Riddles for Small Businesses

Novel Ways to Solve Exporting Riddles for Small Businesses

Photograph by Michael Blann/Getty Images

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 those businesses 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, Graves introduced 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 third of 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.

Clark is a reporter for Bloomberg Businessweek.

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