In a powerful trend that is reshaping the economic landscape, a rising wave of U.S. small businesses and start-ups are going cross-border and selling hundreds of billions of dollars in goods and services to Asia, Canada, Latin America, Europe and Africa.
While big corporations dominate global business news, small companies are charging into overseas markets at a faster pace. From 1992 through 2007, exports by U.S. small businesses have soared nearly fourfold to $400 billion, according to a preliminary estimate by economist Harvey Bronstein of the U.S. Small Business Administration.
That number could climb more if the weak U.S. dollar continues to boost exports, and if the Federal Reserve and lenders keep lowering rates to help fire up the cooling economy.
"Exports are the under-recognized opportunity for many American small businesses," says SBA Administrator Steve Preston, who hosted a trade conference Monday in Hialeah, Fla., with Commerce Secretary Carlos Gutierrez. "A lot of small businesses have very good products that are very competitive overseas."
As the global economy grows, half of U.S. small businesses will be involved in trade by 2018, predicts a recent report by the Institute for the Future think tank in Silicon Valley and software company Intuit.
A confluence of forces — from the weak dollar to more open markets — is feeding the trend, according to consultants, business professors and government officials.
Small businesses are getting a lift from the flagging U.S. dollar, which makes exports cheaper for customers in other nations.
At Breakaway Technologies (www.BreakawayTechnologies.com), a small firm in Park City, Ill., that leases computer equipment, more than half its increasing sales go directly to customers abroad or to U.S. buyers who then ship goods overseas, says founder and CEO Betsy Shields.
Even with the U.S. economic slowdown, her revenue for this year's first quarter has risen 3% from the same time in 2007 — "which is better than I expected in this economy," Shields says.
Other forces: Free trade is opening more markets for small businesses, which the SBA defines as firms with fewer than 500 employees. Millions of immigrant entrepreneurs, from mom-and-pop chains to technology firms, are hungry to grow their businesses by selling in their homelands. The Internet and stronger transportation and banking networks make it easier for small companies and consumers to hook up.
"The timing has never been better for small businesses to get out of their backyards and become global players," says Laurel Delaney, founder of GlobeTrade.com, a consulting firm for small businesses.
Small business owners who are taking advantage of cultural ties, the Internet's global reach and marketing savvy to dive into international trade include:
•A Vietnamese-American entrepreneur. Jacquelyn Tran, the 31-year-old CEO of online cosmetics retailer Beauty Encounter (www.BeautyEncounter.com), was a toddler when her parents left Vietnam to settle in Orange County, Calif., three decades ago.
Her parents sold perfume and other goods at a flea market for several years, then opened a retail store in the fashion and garment district of downtown Los Angeles.
After Tran graduated from the University of California at Irvine with her business degree, she raised her parents' business to a new level in 1999 by launching an online business to sell their goods.