In order to better understand the current mindset of U.S. SME exporters, trade services insurer Euler Hermes recently surveyed a representative sample of businesses about their opportunities, challenges and growth-related needs. Initial results showed that most non-exporters (73%) see themselves as limited to the U.S. market based on their product lines. However, 20% are interested in exploring new markets outside the U.S. and 8 in 10 of those companies believe they will begin to export within four years.
Among exporters, 56% of SMEs tend to export to a few markets and view it as an important and growing part of their business, while 25% export to a few markets and claim it is a small part of their overall business. When asked about the benefits of B2B exporting, increased sales and profits are most important (77%), at par with giving exporters a competitive advantage (77%). Stability during difficult times (74%) and increasing position as industry leader (73%) are also very important benefits for exporters. Among non-exporters, 70% think exports could boost sales and profits and 67% believe it would strengthen their image and position as a global player.
Two in five SME exporters (39%) believe that their international customers are more risky (39%). 37% sell through different distribution channels as they feel their international and domestic customers are altogether different. 30% of respondents state that customers abroad demand longer payment terms, and 22% feel that they need to add additional risk protection techniques to deal with international buyers. A third of SME exporters have experienced a non-payment issue in the past year with an export shipment, with a mean of 4.1 times for this group of exporters.
Exporting SMEs estimate that if they had all the tools to be successful in B2B exporting that they could increase their revenues by 26.3% in three years, and by 42.2% in five years. This is equivalent to 8.5-8.8% turnover growth per annum, a sizeable boost. A little more than one-third of SME exporters view exports as a means of increasing revenue with little incremental cost (38%) or a way to make operations more efficient (32%). However, 27% complain about foreign trade tariffs, 20% see exports as too costly (while 40% of non-exporters do), 20% worry about getting paid and 18% are concerned about political risks abroad. Among non-exporters, 21% do not know much about exporting and are not even sure where to start.