little boxes with shopping carts sitting on top of a laptop keyboard
From choosing the right market to deciding which tools to use, overseas exporting can seem daunting to many small businesses — but the payoff can prove worthy of the investment. — Getty Images/Tevarak

Small business constitutes a big slice of American economic activity. More than half of the private sector workforce is employed by small businesses, which are defined as those with less than 500 workers. Combined, these businesses generate $6 trillion annually in the U.S.

The success of small business has a substantive, positive impact on the overall U.S. economy. Conversely, when small businesses overlook the 95% of the world’s consumers residing outside U.S. borders, that has an impact as well. According to a recent report from Google and the U.S. Chamber of Commerce, that is exactly what’s happening: Currently, only 9% of U.S. small businesses are marketing and selling internationally.

The report, “Growing Small Business Exports: How Technology Strengthens American Trade,” makes it clear that an increase in exports by small businesses would be a positive for the overall economy and a boon to the businesses themselves. Small businesses that export are growing faster than their non-exporting counterparts, the report says.

Perhaps the most powerful argument for small business exports is the willingness of those currently doing so to enter new overseas markets — from an average of seven in 2016 to 10 in 2018. The numbers make it clear that for small businesses taking the leap, exporting is a positive step.

The survey of 3,800 small businesses on which the report was based sought to discover why more of them don’t choose to export. The report considers the barriers, both real and perceived, preventing more small businesses from engaging with international customers.

The report lists the most commonly cited barriers, as well as the tools successful exporting businesses are using to mitigate and/or overcome them. One actionable piece of information the research uncovered was that 73% of small businesses are unaware of the digital tools already existing to overcome barriers to exporting. Many of these are aids to marketing and selling and are currently being used by 92% of the small businesses that do export.

Tools for choosing a market

Identifying your target customer (or an entire market) is an important early step in a successful marketing campaign. Before the internet brought us all closer, researching the wants and needs as well as the social and business customs in offshore markets was an expensive and time-consuming proposition. Foreign market research required an overseas trip or a local partner. Language barriers and currency conversion added additional levels of difficulty.

Technological advances like Google Search, instantaneous language translation, email and video conferencing have changed the international business landscape. Global market information — from product viability to competitive pricing — is as close as a computer and a search engine. In fact, some of the most powerful tools for identifying potential overseas markets are those small businesses already use domestically.

Tools for choosing the best market(s) include:

  • Google Market Finder: This tool’s detailed market insights include the way in which customers in a specific country use the internet and information about their disposable income. Based on information small businesses share about themselves and their product, Market Finder helps them identify the correct global market(s).
  • Quartz Atlas: This searchable database can assist with area-specific questions once a business has identified a potential target market. Using easy-to-read graphs and charts, the site allows for keyword search for information on population trends, gross domestic product (GDP) growth, health statistics and more, all broken down by topics such as economics, technology and finance.
  • Facebook: Facebook offers a broad selection of tools designed to assist advertisers in taking their message to a global audience. Information includes how to choose markets, analyze brand recognition and take advantage of current trends. Facebook tools include online content at Blueprint.
  • International Trade Administration: The Market Diversification Tool provided by the ITA is designed to assist potential exporters in identifying new markets. Information includes the general potential of a market to accept more U.S. exports of a particular product. Also located on the ITA website are links to more than 100 U.S. Commercial Services offices that can further assist with market identification in over 70 countries.
  • Export.gov: The Initial Market Check at export.gov provides potential exporters with an initial assessment of the potential of their product in a chosen market. The service includes written recommendations based on feedback from up to five companies currently doing business in the same arena.

The various marketing options available allow small businesses to customize a market approach based not only on geography, but on product and target customers.

Tools for overseas marketing

Once a small business identifies a target market, the next step is making its presence known. Recognition that not all markets are equal is key to a successful exporting strategy. Building an effective overseas marketing campaign means identifying the best language to advertise in, knowing what devices are popular in the target market and the best tools to use to put a plan into action. Google’s Market Finder provides all of that information. Based on the gathered information, small businesses have a lot of tool options for overseas marketing, including:

  • YouTube: The various marketing options available allow small businesses to customize a market approach based not only on geography, but on product and target customers. For Choon Ng, founder and CEO of Rainbow Loom, the answer was YouTube. Choon, looking for a way to connect with his two daughters, created a loom to make rubber band bracelets and charms. His product, called Rainbow Loom, was a hit with his daughters and their friends, but he had difficulty selling the product to local toy stores. Fortunately for Choon, what the toy stores didn’t get, the YouTube viewers did. The instructional videos Choon posted went viral and the product went international. Rainbow Loom, based in Farmington Hills, Michigan, sells 60% of its product (14 million units) outside the U.S. and ships to over 75 countries. The company spends half of its advertising dollars on Google ads and makes use of Google Analytics and AdSense to track the effectiveness of its advertising campaigns.
  • Pinterest: According to the Google-CTEC report, 87% of small businesses that currently export consider online advertising tools important to that effort. One such platform with a global reach is Pinterest. Through Product Pins, small U.S. businesses have a tool to attract some of the 150 million active users who live outside the U.S. These shoppable Pins can be linked directly to a company’s website.
  • Instagram: Language differences are not the business barriers they once were. Platforms with a visual focus, like Instagram, are one reason small businesses are finding it easier to communicate with potential customers in overseas markets. Currently 89% of the site’s users are outside U.S. borders. By leveraging the visibility Instagram affords small businesses, those with a photogenic product and good photography and video skills can quickly attract an international following.
  • Facebook: According to Facebook, the site has connected over 1 billion people to a business in a foreign country. The marketing tools available on the social media site include Dynamic Language Optimization and Audience Insights. Small businesses already advertising on the space can use these tools to leverage information about current customers and identify potential future ones.

Tools for overseas selling

When the market has been identified and the customer reached, there are still unique challenges to making that cross-border sale. Payment must be collected and product must be packed and shipped. Customs issues must be considered. The report lists e-commerce websites and online payment processing tools as key to addressing these issues. The platform(s) a small business chooses will depend on their product and their target market. Overseas selling tools include:

  • Amazon Global Selling: For some small businesses, partnering with an e-commerce giant may be the easiest way to enter the export business. By leveraging Amazon’s technology, including its Central Language Switcher, small businesses can take a step-by-step approach to exporting by entering one or more foreign markets at a time.
  • eBay: Products listed for sale on the online auction site can be made available for purchase by international buyers for no additional fee. For some small businesses wishing to test the viability of a product in a specific market, this could be a good first step. Payment is taken through PayPal (which eBay owns) and shipping is the responsibility of the seller. Information about restricted products and countries is available in the website’s help section.
  • Etsy: For businesses selling handmade products, vintage goods or craft supplies, Etsy is a way for small businesses to both advertise and export product on a manageable scale. By accepting payment through PayPal and using the shipping tools provided by the United States Postal Service, UPS and other shippers, sellers can choose to export to specific countries.
  • Individual website: Many platforms that host domestic websites have the ability to host internationally as well. Through them, small businesses wishing to sell direct to consumers in other countries have a multitude of tech tools available. Google Translate will reproduce a webpage in over 100 languages. Shopify and Squarespace have integrated tools to assist with currency issues. Web hosting platforms offer different cost structures and levels of assistance, making it possible for almost any small business to become an exporter.

The Google-CTEC report makes it clear that, while small businesses wishing to become exporters have a multitude of tools available, there is room for much improvement. Businesses are not aware of the technology, which means small business is not living up to its potential as a generator of economic activity and jobs.

The report recommends collaboration between federal and state governments and private sector stakeholders to address the information gap. It also recommends support for the continuing development and refinement of these digital tools.

Published January 27, 2020