The economic and geopolitical landscapes have changed since December 1999, when the Department of Commerce published a rosy report on the state of small and medium-sized exporting businesses. But despite a global economic slowdown and series of wars, the trajectory for U.S. small exporters has remained largely positive.
"Not being one of the big guys has been an advantage, because we can move faster," says Agustin Ramirez, CEO of HUSCO International, the number 3 company on the Hispanic Business Top 50 Exporter directory (see p. 56). In fact, larger companies have generally cut back on exporting – between 2001 and 2002, for example, total U.S. exports dropped 5 percent, according to data from the Commerce Department. But exports at Wisconsin-based HUSCO, a manufacturer of hydraulic systems, have remained steady for the last several years, and Mr. Ramirez has taken the opportunity to grab market share from his larger competitors.
Data from the Commerce Department study show a gradual shift toward small exporters in the U.S. economy. Between 1987 and 1997, the number of U.S. exporting firms tripled, with the bulk of the increase attributable to companies with fewer than 500 employees. Such companies accounted for 96.5 percent of all U.S. exporters in 1997, according to the study. Although the total goods these companies exported in 1997 represented slightly less than one-third of all U.S. exported goods, the study shows slow but steady erosion of big-business dominance of the export sector during the 10-year period (see graph, "Exporters Large & Small").
More recent data are presented in the Hispanic Business Top 50 Exporter directory. Since 1999, total export-based revenues for the Top 50 companies have nearly tripled, from $592.11 million to this year's $1.51 billion. The retrenching of exporters that has occurred since the late 1990s has set the stage for impressive growth among Top 50 companies and other Hispanic firms involved in exporting. As Mr. Ramirez puts it: "Bad times are not necessarily bad in the long term." In other words, bad times can spell opportunity for the internationally minded CEO.
One successful strategy smaller companies have employed is to focus on developing exports in just a few markets instead of taking on the whole world at once. According to the Commerce Department study, 63 percent of small and medium-sized exporters sell to only one foreign market (see graph, "Foreign Markets of Small Exporters").
"We have global competitors, but we tend to focus on being a large participant in the markets we are in," explains Mr. Ramirez. "We do this by offering the best performance quality, for the price, of any competitor, which is largely a function of our ability to purchase materials for our products at the best possible cost. It's difficult to find good suppliers, but we've found that [suppliers] today are hungry to have more business." HUSCO exported $81 million worth of goods in 2002, up from $60 million two years before.
Miami-based Brightstar Corp., the number 2 company among the Top 50 Exporters, has succeeded by focusing on specific countries in Latin America – and specific customers within those markets. The cellular equipment wholesaler now plans to apply the same strategy to the massive U.S. wireless market. "We saw an opportunity in Latin America and decided to pursue it," says CFO Oscar J. Fumagali. "Now that we have been successful in a very difficult market, we have decided to bring our talents and know-how to the U.S."
Most Popular Stories
- Consumer Spending Will Offset Sequester: Economists
- Hispanic Grads Pass Their Peers in College Enrollment
- AT&T Seeks to Fill 120 Jobs in South Carolina
- Gas Prices Expected to Stay High
- California Considers Oil Tax to Fund Schools
- Dude! California Beach Parking Plan Making Waves
- Ford's Supplier Diversity Program Turns 35
- Yahoo to Pay $1.1 Billion for Tumblr
- NTSB Wants to Lower Blood Alcohol Limit to 0.05
- Boise Terror Suspect Pleads Not Guilty