I want you to do something I'd like you to take a moment and visualize a successful international business picture the company that you believe best epitomizes global trade did you picture a global multinational conglomerate one of the world's largest corporations Global 100 or the like how about one of the companies actually has the word international baked right into their name maybe IBM AIG or ING is it one of the global brands that you see when you travel overseas everywhere Subway KFC or 7-eleven for example or maybe the gap which is now a familiar sight all
around the world how many of you pictured a small business with fewer than 50 employees one with only a single location a family-owned and operated business this isn't what springs to mind for most people when they think about international trade but the fact is that over 98% of exporters are small and medium-sized businesses in the United States alone that's over two hundred and sixty nine thousand local businesses that have successfully gone global for the past twenty five years I've been working with companies as they enter and expand into foreign markets and they really aren't who
you think they are so what are they like who are they and what do they sell and more importantly what can all the companies that haven't yet gone global learn from their example back in 1996 The Millionaire Next Door was a surprise hit on the New York Times bestseller list and it totally challenged our perception about who the affluent really are we learned that the wealthy weren't really much like Blake Carrington the oil tycoon from the 1980s TV hit dynasty or his 21st century equivalent lucious Lyon from Empire actual millionaires turned out to be far
more like modern families Jay Pritchett the people that we see in our neighborhoods every day predominantly running their own small businesses living very modestly and disproportionately driving pickup trucks it turns out that this is also very true of international business and a whole new generation of millionaires next dorm are being created by small businesses that are increasingly going global the fact is that in the United States currently over 90 percent of successful exporters are single location small businesses 37% of which have fewer than 20 employees think about that for a moment over a third of
successful exporters are about the same size as your favorite local clothing boutique in fact some of them actually are your favorite local clothing boutiques the cliche would be to call the mom-and-pop businesses and many of them are but many more would actually be better described as mother/daughter businesses a growing percentage of them are female owned and operated so what do small businesses export well really anything and everything here are some examples of small business shipments in just the last week custom-made tops for off-road vehicles material for making dental molds multi-level luxury Kitty houses slobber proof
webcams so you can Skype with the dog while you travel tailored orthopedic products woodworking equipment skateboards stand-up paddleboards and my personal favorite steampunk costume jewelry okay this one might require a little bit of explanation these aren't very very tiny steam engines steampunk is a huge trend among fans of science fiction and fantasy that Rhian visions the genre with 1800s era Industrial Revolution inspiration think George Lucas meets Jules Verne Princess Leia in a hoop skirt with a parasol and the Millennium Falcon is now a dirigible with ornate gears and tail fins this exporters my favorite because
they're very illustrative of how many businesses first get involved in international trade this is one of those mother/daughter companies we were talking about a minute ago and a couple of years back they weren't planning to export at all in fact they wanted to import their plan was to import really cool retro Victorian and Gothic jewelry to sell the steampunk fans who dress up costumes and go to conventions and what they'd hope to do was to import these items from the coolest Victorian and gothic places that they could think of but they couldn't find a supplier
in London or Hong Kong or Prague or anywhere else they thought that things like this might be found so they had their own pieces custom manufactured and they put them up on their website hoping to sell to the locals who were working on their costumes for Dragon Con aka nerdy Gras an annual event drawing fifty-two thousand genre fans but what they got were orders from London and Hong Kong and even Prague and that's when they did what many companies do when first presented with international growth opportunities they fought those orders off hard they walked away
from sales and left money on the virtual table they told customers that they were only set up to sell domestically and they even put terms to that effect on their website but they also had their phone number on their website and one persistent potential international customer absolutely insistent that they were going to take her money called and patiently walk them through what would be required to ship her order internationally and it turned out to be a lot less difficult than explaining what steampunk is when they got to the part about payment the customer credulous Lee
asked them you do have credit cards in your country right so now today this business has very different terms on their website and more importantly they've got over 280,000 in international top-line sales which have grown to account for about a third of their revenue there are thousands of examples like this small business owners becoming unlikely millionaires by opening their shops to international trade but here's the crazy part in the United States fewer than 1% of companies currently export this is the lowest level of active exporters in the industrialized world the vast majority of US business
stops at the border we talk about leaving money on the table yikes why is this the case international borders have never been more permeable to trade than they are today the fact is the barriers that most companies face going international just aren't the borders on the map the borders they have a hard time crossing are the ones that they establish for themselves doubt uncertainty fear doubt that there's international opportunity available for them uncertainty and by how to reach customers in foreign markets and fear fear that international business is inherently risky now this first self-imposed border
doubt that there's international opportunity available for most businesses it simply couldn't be further from the truth the international trade administration reports that over 70% of the world's purchasing power is now located outside the United States along with 95% of the world's consumers international opportunity isn't just knocking at your door it's already eating your porridge sat in all three of your chairs and it's heading upstairs to figure out which one of your beds at once the second self-imposed border is uncertainty uncertainty about how to reach customers in foreign markets and this is what causes most companies
to pull the virtual welcome mat off their websites and confine themselves to domestic sales what if we do something wrong they ask what if we sell things we aren't supposed to to people or places we aren't supposed to okay that's not actually international business that's called smuggling that's something completely different and if your border shifts that quickly from we don't know how to export to what if we accidentally become international crime lords it probably wasn't a very firm word to begin with and either way there literally is an app for that and it'll keep you
out of trouble and it's available to your business for the low low cost of absolutely free the final self imposed border is fear and many companies truly believe that engaging in international growth opportunities opens you up to everything bad that can possibly happen loss damage theft delay diversion regulatory penalty the high seas piracy some of them have seen the movie captain Phillips maybe one too many times numerous studies have shown that it's actually far more risky to remain confined to the domestic market is to engage in international growth opportunities companies that export have exponentially more
growth opportunity available to them than those that don't and they are nearly eight and a half percent less likely to go out of business than those are confined to the domestic market knowing those numbers why wouldn't you export that 1% of American companies that do currently export they have phenomenal growth opportunities those are the businesses that are creating the next generation of millionaires next door and even some billionaires a moment ago we talked about the gap when we were talking about visualizing a successful business do you know how they got started a husband and a
wife having a very hard time finding pants that fit him opened a single small store to sell blue jeans and vinyl records today they shipped to over 90 countries around the world and they open up more stores internationally every year than they do domestic ones for today's neighborhood business the neighborhood is now a whole lot bigger the world is your neighbor and it's waving and it's smiling it's trying to get your attention because it wants to do business with you and it's time to wave back thank you
