Tom Kneeshaw says managers of small businesses in rural eastern Washington often ask him why they need the headaches of exporting when they've already got more than they can handle in the U.S. market.
When a company with a good product and an established track record asks that, Mr. Kneeshaw says he usually smiles and tells them they should only export if they want to boost profits, eliminate economic peaks and valleys, or survive when global competitors appear.Mr. Kneeshaw is the project director for AgriTechnics International, in Pullman, Wash., one of several ventures that received state grants to help promote exports and better transportation of products. The grant program is seen as a means of fostering economic growth in areas outside Puget Sound.
Working under the Palouse Economic Development Council, he is currently expanding exports from 11 counties in east of the Cascade Mountains.
"Most small companies still think exporting is just for big businesses," he said. "Yet 52 percent of the companies involved in exporting have fewer than 100 employees. Obviously, small companies can succeed at exporting."
Mr. Kneeshaw said he is currently explaining to firms in eastern Washington that oil price increases are likely to restrain U.S. economic growth at a time when Asian markets are expected to continue to grow at a rate of more than 10 percent a year.
"It might take a year or two to develop a foreign market, but this is where market growth is going to be for the rest of the decade," he said.
AgriTechnics urges companies with world-class products to use such booms in some parts of the globe to even out their revenue flows, which otherwise might rise and fall with the growth-recession cycles in the United States, he said. Overseas sales in developing nations can also provide an after-market for products that have fully amortized their costs, but for which U.S. demand has dropped off, he said.
The export promoter also noted that the U.S. International Trade Administration estimates that 70 percent of all U.S. products face international competition.
"That competition may not be established in your local market yet, but it will be in the next three to five years," he said.
Failure of small companies to become involved in exporting is likely to leave them vulnerable to decisions by their customers to turn to foreign sourcing in the next few years, he said.
The result may be that many companies that ignore international sales will forfeit their chances to ever grow into anything more than a mom-and-pop business, he said.