Connor Sport Court is one of thousands of Utah businesses that are finding new ways to innovate, compete and grow jobs in an increasingly global environment. Nearly 2,900 Utah companies are involved in exporting, and 88 percent of these are small- to medium-sized businesses, according to the International Trade Administration. In 2012, Utah exports exceeded $19.1 billion, according to World Trade Center Utah.
If your company is looking to expand into the global marketplace, here are a few considerations to help you get started:
- Network and share best practices though organizations such as the World Trade Center Utah and the U.S. Department of Commerce Utah Export Assistance Center.
- For businesses thinking of entering the export market, financing is available from the U.S. Small Business Administration. This financing — up to $500,000 — can be used for any export purpose, including market development, attending trade shows or trade missions and securing export licenses.
- Once you are prepared to export, the SBA’s Export Working Capital Program can help finance your activities up to $5 million. The SBA also offers international trade loans — available up to $5 million — that can be used for acquisition, construction, renovation or expansion.
- For larger deals, a financial institution with designated authority can use its Export-Import bank to increase loan limits above $5 million.
Understand letters of credit
- If you cannot secure a foreign buyer’s payment in advance, a letter of credit can help. Your buyer’s bank will issue the letter of credit in your name. Essentially, the bank is guaranteeing payment to you, the seller, by the buyer. Another important function of a letter of credit is that it can enhance your ability to obtain financing, as most banks will not lend against foreign receivables.
Price your product
- Another key consideration when exporting is whether to price your product in U.S. dollars or local currency. One advantage of pricing in local currency is that your buyer is not penalized by a conversion rate. This can make you more competitive and, in some cases, reduce your cost.
- Consider a multi-currency bank account, which allows you to deposit multiple types of foreign currency in the same account and make payments from the account without having to convert to U.S. dollars every time.