Small businesses see the U.S. borders as thresholds—opportunities to expand beyond their existing markets to a world that also desires their products or services.

Since the 1950s, foreign trade as a share of U.S. gross domestic product has tripled, according to the U.S. Chamber of Commerce. Today, it represents more than 13 percent of the GDP.

Small businesses are the foundation for that growth. The U.S. Small Business Administration reports that 202,186 of the 209,650 firms exporting are small businesses. That's 97 percent of all the firms directly involved in exporting.

"The world is getting more global and small business is going along with that," says Bob Galiszewski, a shareholder at Leading Edge Alliance firm KAWG&F.

Why now?

The burst in international interest and growth came with the explosion of Macs and PCs in the late '80s and early '90s combined with the rapid growth of the Internet, says Bruce Berton, officer and director of international business consulting at Stonefield Josephson, a Leading Edge Alliance member.

"Communication became much easier, especially in crossing international lines," he says.

Suddenly, a businessperson on the East Coast did not have to wake up in the middle of the night to call a client in Singapore. Instead, she could correspond with her client through e-mail and he could reply in the same manner whenever it was most convenient.

But it wasn't simply advances in technology that led to the growth in exports. With the signing of the North American Free Trade Agreement in 1994, opportunities to do business in Mexico and Canada without duties or quotas became available. NAFTA also started an expansion of the United States entering free trade agreements (see complete list on next page.)

Combine the easier accessibility to technology and the governmental actions to open free trade with the downsizing of the 1990s and an export boom is born. Berton says that many high-caliber, well-trained people were without jobs and wanted to use their specialty in the marketplace. These people saw opportunities on a global platform where they could do business without having to invest in a huge infrastructure.

In addition, transportation became easier. DHL, FedEx and UPS all make getting products to another country much easier.

"The world has become more globalized," Berton says. But opening a new office in another country is not a requirement to reap those global benefits. "It's a gamble to set up bricks and mortar," he says.

Since the turn of this century, new markets have opened up that were not available 10 or 15 years ago. Countries that previously shunned consumerism are opening up their borders. For example, women's cosmetics giant Avon today does more than $1 billion in business in China, Berton notes.

Galiszewski says a common mistake of U.S. businesses today is that they perceive the international scene as anti-American, or at the very least, not pro-American. However, he says, there is still a large demand for American-made products.

Even more recently, the weak U.S. dollar is making American goods less expensive, and thus more attractive in the international market, according to the U.S. Department of Commerce.

Small businesses have advantages

Small businesses make up the majority of U.S. exports because they can adapt to the rapidly changing international marketplace more quickly than large companies.

"Small and mid-size businesses have the flexibility of changing horses in the middle of the stream without falling behind or getting wet," Berton says.

Focused growth is important, business advisors say. Specializing in certain niches while understanding the big picture allows that flexibility.

Sonia Freeman, a shareholder/director at PKF Texas, a Leading Edge Alliance firm, says some companies take their international role even farther and operate outside the United States even if it's only a sales or distribution office, for several reasons, including:

• customers' needs
• economics of business
• desire to appear global
• to be truly global, not simply shipping from the United States

Companies go overseas because they want to be physically closer to existing customers who want their providers to be nearby, Freeman says. Some non-U.S. companies want to do business with local people even if they know the company is U.S.-owned, she adds.

Jon Young of Beach, Fleischman & Co., a Leading Edge Alliance firm, says he sometimes encounters small business owners who worry that operating outside their U.S. territory will lead to a loss of control of their company. They express concern about diminishing quality.

In these cases, Young says, he challenges that reluctance and suggests smaller first steps. For example, a company interested in operating in Mexico could open a small office in Nogales on the Mexico-U.S. border. From there, the owner can see how easy or difficult operating the business is. Ultimately, he may feel more comfortable about doing business outside U.S. borders and expand his company, Young says.

A case in point: a U.S. company opened a plant in Obergon, Mexico, to manufacture plastic razors. Of the 1,000 employees, only one is an American. Company executives, though, can monitor the 24-hour-a-day system from anywhere in the world. Technology allows them to monitor the output of each machine at any moment, Young says. In addition, videoconferencing allows the offices to communicate across long distances without the time and expense that travel requires.

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