U.S. companies with global export operations
consider international sales a major contributing factor to revenue
growth
Revenues are on the rise for small and mid-sized U.S. companies
that sell goods and services internationally, according to the 2016
American Express Grow Global Survey. In the survey of companies
selling outside the U.S., 80% say revenues are greater compared to
one year ago, and on average, one quarter (26%) of their revenue
growth can be linked to international sales alone. Additionally, as
companies forecast future revenues, they are optimistic about
exporting. Over the next five years, more than three-quarters (76%)
anticipate their revenue from global sales to increase by about 30%
on average.
While an overwhelming majority of surveyed companies (90%) agree
that international markets offer significant growth opportunities,
growth does not come without challenges. The most significant
concerns for those selling outside the U.S. include the ability to
build relationships with foreign partners (75%) followed closely by
the ability to comply with local and international law, trade
regulations, and transportation and shipping costs (each, 73%).
Businesses recognize they need help navigating challenges that
arise when doing international business, some of which include
cultural differences/different business practices (65%), political
instability (64%), language barriers (59%) and a general lack of
knowledge about the markets in which they operate (57%).
American Express (NYSE:AXP) created the Grow Global program in
2015 to help ease business owners’ concerns, and provide valuable
resources and networking opportunities for U.S. small and
medium-sized businesses that currently export as well as those who
are considering exporting.
“Our research shows that despite potential challenges, many
companies still see international business as an important growth
opportunity,” said Ed Marsh, Export Advisor to American Express.
“Through our Grow Global program, we know that getting started can
often be the hardest part, but when businesses get on the path to
global sales, they realize exporting has organizational benefits
beyond just revenue growth.”
The Path to International Sales; Intentional vs. Accidental
Exporters
According to the survey, most small and mid-size businesses
entered foreign markets intentionally as part of a strategic
business decision (78%), and many of them (63%) feel informed about
how to conduct international business. However, while most
intentional exporters feel informed about conducting business
globally, almost four in ten (37%) indicated they have insufficient
market knowledge on exporting, meaning they could benefit from the
ability to tap into knowledgeable resources.
In contrast, as many as one in five small and mid-sized
businesses (21%) began exporting accidentally when an opportunity
fell into their lap. Comparing these accidental exporters to their
more intentional counterparts:
- 44% say they are very informed about
how to conduct international business (vs. 69% in the intentional
exporters group)
- 44% say they are familiar with the
markets where they sell (vs. 51% who export intentionally)
- 29% say they are familiar with the
culture where they do business (vs. 44% in the intentional
exporters group)
To obtain knowledge about the international markets where they
do business, companies overall are most likely to rely on their
network (71%) or the websites and marketing material of potential
trade partners and customers (64%). Significantly fewer rely on
data from market research reports (54%), news publications (47%),
advisory firms (40%) or government programs (33%).
North America is the Focus of Future Investment
Of small and mid-sized U.S. companies that currently sell
internationally, sales efforts are mostly concentrated in Mexico or
Canada (43%) and Europe (29%), with much fewer selling in Asia
(17%). Mexico and Canada are the first choices (34%) as regions
with the most potential for exporting sales over the next five
years, followed by Asia (24%) – particularly China, Japan and
Korea. This suggests that while exporters are more likely to see
the regions where they are already exporting and regions nearest to
home as possessing the greatest growth potential, Asia may
experience increased sales efforts in the next five years.
Nearly two-thirds of surveyed businesses (63%) have sought
financing in order to invest in entering and growing business in
these regions. Eight in ten (82%) say they have used a variety of
working capital and receivables financing tools to supplement
commercial finance products for growth in these markets.
The Impact of Global Economic and Political Environment on
Plans for Trade
Despite the changing global economic and political environment
over the last six months, few companies say they are being cautious
about their future plans for international trade (30%). In fact,
nearly four in ten (39%) plan to increase their efforts to pursue
sales internationally in the next six months, and roughly one-third
(31%) say changing global economics have had little impact on their
future plans.
However, the upcoming U.S. presidential election is one factor
that may have more of an impact on plans for international trade.
Seven-in-ten (70%) say the impact of the election will be at least
‘somewhat significant’.
To learn more about the American Express Grow Global program,
visit www.americanexpressgrowglobal.com. The next Grow Global event
will be in Long Beach, California on October 27th.
Survey Methodology
The 2016 American Express Grow Global Survey is based on a
sample of 500 U.S. companies, ranging in size from $250,000 to less
than $1 billion in annual revenues, who report a portion of their
company’s annual revenue is currently derived from the sale of
goods or services outside of the United States. The anonymous
survey was conducted online among decision makers in the areas of
business development, sales strategy or marketing by Teneo Strategy
August 11-19, 2016. The poll has a margin of error of +/- 4.4% at
the 95% level of confidence for the overall sample.
About American Express Global Commercial Payments
Through its Global Commercial Payments division, American
Express offers a suite of payment and lending products that
help businesses and organizations of all sizes gain financial
savings, control and efficiency. Global Commercial Payments
provides solutions for travel and everyday business spending, cross
border payments, global currency solutions, and business
financing.
To learn more about Global Commercial Payments visit
business.americanexpress.com.
To learn more about American Express OPEN, which provides
products and services for small businesses and entrepreneurs in the
United States, visit www.OPEN.com.
About American Express
American Express is a global services company, providing
customers with access to products, insights and experiences that
enrich lives and build business success. Learn more
at americanexpress.com and connect with us
on facebook.com/americanexpress,
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and youtube.com/americanexpress.
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version on businesswire.com: http://www.businesswire.com/news/home/20160929005079/en/
M BoothRyan Walker, 212-388-77677RyanW@mbooth.comorAmerican
ExpressMelissa Filipek, 212-640-8658Melissa.J.Filipek@aexp.com
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