SMALL US FIRMS WARY OF EXPORTING

SMALL US FIRMS WARY OF EXPORTING

Tiny B&R Harness Supply once shipped horseback riding equipment to West Germany and South America. It stopped in 1982.

And despite today's cheap U.S. dollar, B&R doesn't plan to start up again.We've had too much trouble getting hard currency out of a lot of these countries, said owner Bill Shaw. These are hard times in Latin America.

B&R, based in Hialeah, Fla., stopped exporting in 1982 because of fluctuating currency rates, a drop in South American business and the retirement of its major customer in West Germany.

The firm, with 10 employees and sales of $300,000 a year, is typical of small businesses that are steering clear of the export market. Despite government-sponsored efforts, the recent export boom has, to a great degree, failed to lure tiny firms back into the export business.

Currently, 250 U.S. corporations account for more than 80 percent of all exports; however, more than 30,000 U.S. small businesses offer goods and services with potential to be sold overseas, said a 1987 report by the House of Representatives' Small Business Export Opportunity Task Force.

The government has several reasons for trying to promote exports: small businesses represent the fastest-growing sector of the economy, small firms normally do not export and the government is grasping for ways to ease the U.S. trade deficit, which last year topped $170 billion.

But a recent study by David Birch of the Massachusetts Institute of Technology for Inc. Magazine reports that companies with 20 or fewer employees are far less likely to export than are companies with 20 or more employees.

Some small firms, like B&R, are worried about getting paid. Others are worried about revolution. Many were stung in the early 1980s, when a sharp drop in oil prices plunged Venezuela and other nations into recession. Since 1982, numerous small exporters have gone under, according to exporters who are still in the business.

If I had to make a decision right now about whether to start a small exporting company, I would think twice about it, said Nicolas Aguirre, a Miami exporter whose Americas International firm sells hospital equipment in South America and has had trouble getting money out of its main trading partner, Ecuador.

The Commerce Department has a lot of programs to help small businesses that want to export, but I do not think they are enough to overcome the problems, Mr. Aguirre said.

The U.S. Commerce Department spends about $200 million a year to promote exports and is intensifying its efforts with Export Now, a new campaign to convince businesses that they should take advantage of their price competitiveness overseas.