Most people think of small business as the local store or service provider selling goods or services to local people.
The fact is that many small businesses are exporting and the number is increasing, which is good for Australian employment and the economy.
In 2013-14 there were nearly 20,000 small businesses exporting goods, representing 44 per cent of all exporters. In recent years there has been an increase in small firms that are “born global”, meaning that they are exporting from the outset.
There are many start-ups and entrepreneurs who are taking advantage of the internet and free trade to identify and target overseas markets.
Australia’s economic relationship with China shows little sign of slowing. There are almost unlimited export opportunities for Australia’s small business sector in China and other markets.
For some small businesses the perception can be that it’s too hard to export, but they should know there is support available. There are many established business networks in Australia that can help intending exporters to decipher whether a bright idea makes good overseas business sense.
Austrade’s TradeStart has been established to support small businesses by providing local assistance and access to Austrade’s extended network resources.
Many will be surprised to learn the Australian Government has an export credit agency which has provided more than $350 million in finance to 262 small businesses in the past three years.
Efic operates on a commercial basis and can assist in situations where banks might be unwilling to help.
Bottles of Australia
Canberra is the unlikely home of a manufacturing exporter, Bottles of Australia, which has tapped into support from Efic to become a global leader in the production of drink bottles.
The business employs 18 people and is on track to produce 1.1 million bottles this year, about 10 per cent of which will be exported to more than 20 countries.
Efic provided finance to expand overseas after a knockback from banks.
HEGS
South Australian manufacturer HEGS is another that’s benefited. The company makes innovative pegs with hooks that enable clothes to dry without leaving marks.
HEGS holds international patents and now has distributors in the United States, Canada, Mexico, South Africa, England, Scotland, Ireland and China.
The company was provided with a $250,000 export working capital guarantee from Efic, which it needed to cover upfront manufacturing and pre-shipment costs for three new export contracts.
Successful companies growing fast sometimes have limited collateral to offer a bank or the rate of growth is such that it might be expanding faster than its balance sheet. That’s where Efic can step in and take a true cashflow-lending perspective.
The message is that while exporting as a small business can appear daunting, there is considerable help available.
For more information visit www.business.gov.au/smallbusiness.