Here’s How to Grow Your Business by More Than 50% In Just Two Years
(This post originally appeared on Inc.)
Your business is struggling. The competition is tough. Margins are low. Growth seems out of reach.
That was the situation that Robb Dorf found himself in just two years ago. Dorf’s Orange-County, California company, Purefit, makes high-protein gluten-free nutrition bars. And he was struggling. Even with $10 million in sales, his three-person company was losing money and couldn’t get a foothold in domestic grocery stores. So he turned elsewhere.
Fast forward just two years. PureFit now exports to 20 countries and, according to this report in the Orange County Register, his foreign sales rose 53 percent during this period and now not only account for a quarter of his revenue but have helped him eliminate his losses.
“International business saved my company,” he said.
As we move closer to selecting our next President, those who trade internationally are facing challenging times. Both presidential candidates oppose the Trans Pacific Partnership (TPP). And although Hillary Clinton is a supporter of the North American Free Trade Agreement, Donald Trump is against the deal and has also been very vocal in his intention to take on other countries like China for what he calls “unfair trade practices.”
Both candidates have genuine reasons for their concerns. The October, 2015 TPP, whose 12 countries represent approximately 40% of the world’s gross domestic product, has many benefits, among them are the reduction or elimination of certain tariffs, relaxation of investment rules, stronger intellectual property regulations, more opportunities to buy and sell foreign companies, less restrictions on e-commerce and a clearer process for disputes. But the agreement could cost U.S. jobs and does nothing to address currency manipulation – both politically charged topics that are the main reasons behind both candidates’ opposition to the deal.
This presents challenges for small businesses like Dorf’s and others like him in California. According to the above Orange County Register report, small and medium-sized companies like his account for more that 45 percent of the state’s exports, which is higher than the national average.
Trading overseas is difficult. Dorf, for example, first targeted China. He visited there as part of a trade commission sponsored by the CalAsian Chamber of Commerce. Unfortunately, he came away discouraged with the government’s complicated process and the potential for corruption. He felt the same about Russia and then ruled out India because he felt consumers there couldn’t afford his product. He ultimately focused on the Philippines and the United Arab Emirates, partnering with both GNC stores and a sportwear distributor. Figuring out the right market and then selecting a good partner was critical to his overseas success.
But other challenges dogged him. He had to navigate different shipping codes, tariffs and taxes – all in different languages. He found that because he was delivering food that labelling requirements were different for each country (for example, Canada requires labelling in both French and English). He had to deal with government red tape and of course varying consumer tastes by region.
And yet as difficult as this sounds, Dorf is not alone. According to a report from the Wall Street Journal, small companies like his comprise the majority of U.S. exporters. “Businesses with fewer than 500 employees accounted for 294,589 of 301,238 U.S. exporters in 2012, or about 97%, according to preliminary data released by the U.S. Census Bureau in December. Just over half were small manufacturers and wholesalers, and together they generated $460 billion in foreign trade, a $10 billion increase from the previous year, or about 34% of total U.S. exports,” the report says.
To succeed in selling overseas, these companies get help. For example the U.S. Federal Trade Commission has an excellent electronic guide to selling products overseas which answers questions about taxes, duties, customs laws, and more. The Small Business Administration has a helpful export business planner and the U.S. Trade and Development Agency has an awesomeconsultant database chock full of people and firms who can help navigate you through the process, regardless of the country. Many private companies, from FedEx and UPS to EBay and Etsy also have information to help, but you’ll find the best resources on PayPal’s PassPort site which is devoted to companies selling internationally.
Like everything else in life, selling overseas isn’t easy. Even Dorf admits a nine percent drop in foreign sales this year – mainly due to an overall global slowdown. But he says he’s “bullish long-term.” Regardless of who’s elected President, the U.S. will never stop trading overseas. And there will always be opportunities for small companies who want to invest the time to figure out how to profit there.