Insights

By the Numbers: A Look at Overseas Expansion

By the Numbers: A Look at Overseas Expansion

Mar 16, 2017

There’s a lot of press about corporate inversions and losing jobs to other countries. But there’s another side of this story, and it’s the significant benefits of exporting as a way to growth.

The economic statistics on exportation are eye-opening and persuasive.

  • When it comes to shipping goods overseas, the United States is dramatically behind the rest of the world. In fact, less than one percent of America’s 30 million companies export—a percentage that’s significantly lower than all other developed countries.
  • Of those U.S. companies that do export, 58 percent export to one country only. (If your company is one of these one-country exporters, why not change your go-to-market strategy to target another opportunity/country and duplicate that success?)
  • For companies with fewer than 250 employees that export, their revenue is 1.9 times greater than non-exporting companies of their same size.
  • Two years after exporting, companies that export file seven times more patent applications and are more innovative than their non-exporting peers.
  • It’s a misconception that only the largest of companies can export. In fact, small and medium-sized companies account for 98 percent of U.S. exporters.

Clearly, exporting is an opportunity for companies of any and all sizes. But is your company ready?

Just like launching a new product domestically or expanding into a new state or U.S. region, you’ll need a plan. Developing a detailed and thorough international expansion strategy is an important part of the planning process. That includes:

  • Evaluating your product’s export potential.
  • Determining whether you are really willing to make a commitment to international markets and evaluating whether your company is “export ready.”
  • Identifying key foreign markets for your products by conducting market research.
  • Evaluating distribution and promotional options and establishing an overseas distribution system.
  • Determining export prices, payment terms, methods, and techniques.
  • Familiarizing yourself with shipping methods, export documentation procedures, export financing, and other requirements for exporting.

Exploring your organization’s readiness for exportation can be a beneficial exercise no matter the outcome. By carefully considering exportation questions, you can level-set your company domestically. Questions like what’s your competitive advantage, what’s the unique selling proposition of your company and its products, who are your competitors, and what differentiates you from the competition, for example, are all good questions to revisit regularly. They can serve to reset your company and better determine where you’re going—whether that’s at home or abroad.

Author(s)

Kelly Fisher
Kelly M. Fisher, CPA, MST, JD
Tax Practice Leader
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