Exports are usually considered the domain of large companies with deep pockets. However, extensive data indicates that it is just as beneficial for small businesses to engage in international trade. Here are the top 10 reasons why small businesses should consider exports:

  1. Reduced dependence on domestic markets: Often, small businesses lack the means of coping with saturated domestic markets. When this happens, an export market lets them remain in business and have a steady revenue stream.
  2. Combat recession: Domestic purchases often decline in an economic recession. This is when small businesses need to diversify their market base by exporting their goods and services. Having an export market comes in handy in combating the negative impact of a recession.
  3. Expand sales: A diversified export market helps small businesses expand their sales. It is often easier and more remunerative to tap a completely fresh market than try to squeeze more from an existing one.
  4. Tackle bigger companies: Small businesses may find it difficult to compete with large companies domestically. One reason is domestic customers may see a difference in the brand equity of a large company and that of a small company. Tapping an export market can help overcome this obstacle, because overseas buyers would probably not make the comparisons that domestic buyers may make.
  5. Enjoy pricing flexibility: Small companies often have more flexibility in pricing their goods and services in an export market than in the domestic market. This is because bigger companies can afford to diminish their profit margins to consolidate their position in a highly competitive market.  Rather than waste precious resources in competing with bigger companies, smaller businesses can find it more profitable to export.
  6. Derive economies of scale: If a small business has excess production capacity, it will be more profitable for it to produce more rather than less, and sell the excess in an export market. This way, a small business can benefit from economies of scale.
  7. Extend product life cycle: A product may become obsolete in one market, but still have relevance in another market. It is very useful for small businesses to cash in on these opportunities  and extend the life cycle of a product by selling it overseas.
  8. Enjoy faster growth: Surveys of global businesses have shown that companies that export tend to grow faster than those that don’t. This is true of smaller businesses, too.
  9. Derive benefit of seasonality: Small businesses that sell seasonal products benefit greatly from  having an export market. By exporting, a company can turn idle inventory into sales and generate yearlong revenue.
  10. Tackle competition: If the domestic market is very competitive, small businesses can benefit by  tapping into an export market, rather than competing with the big guns.