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The Future is Now: U.S. Small Businesses Overcome Export Barriers
(Released August 2008)

 
  by Peggy Olive  

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A Case Study: Polymer Technology Systems, Inc.

Contents

One company that overcame the obstacles presented by globalization and thrived in doing so, is Polymer Technology Systems, Inc. (PTS). PTS quadrupled sales of its cholesterol-checking device in only three years by exporting to 70 countries around the globe. PTS' handheld meter, called CardioChek, measures key health indicators from a tiny drop of a patient's blood. The small company is based in Indianapolis, Indiana. Cheaper communications, good international contacts, tapping government resources, and creating alliances with larger companies are all part of PTS' success formula. Sales reached $15 million in 2006.

Hand holding cardiochek
Polymer Technology Systems' CardioChek
PTS' big break came in 2004 when Boots, the largest pharmacy chain in the United Kingdom, approached PTS about using CardioChek meters for promotional cholesterol screenings at 1,400 of its stores. PTS later partnered with pharmaceutical companies in Europe that wanted to use the device to promote their cholesterol-lowering drugs.

PTS found that maintaining local distributorship of its product has been a vital success factor. Local alliances made it easier to navigate the different rules, regulations, and customs of the many countries that comprise PTS' international market. PTS also used a program offered by the U.S. Department of Commerce to aid in identifying local distributors. The program searches for and matches distributors in South America with companies in the U.S.

A program offered by the Export-Import Bank of the United States provided another vital component for the export company's success. The program guarantees bank loans for U.S. companies to help them manage cash flow. PTS would often have to wait 90 to 120 days for payments. "Typically, banks don't lend on international receivables," said Mandy Parris, assistant vice president of commercial banking for Chase Bank in Indianapolis. However, with the Export-Import Bank guarantee, Chase Bank provided "the company a $1 million line of credit to start," Bob Huffstodt, CEO at PTS, said.

Like many small exporters, PTS has taken advantage of today's technological advances. The company uses the Internet for market intelligence and to identify potential distributors. It also uses e-mail and mobile phones for easier and cheaper business communications. "Telecommunications, Internet, and air travel have made international business a lot easier today," Hans Fredman, international sales director at PTS, said (Wall, 2007).

Benefits and advantages for small businesses that choose to enter international markets are many and include increased sales and profits, enhanced domestic competitiveness, a reduction of dependence on existing markets, and increased global market share (Exporting Basics, Small Business Resources). Exports will be an important strategic option for small business owners who want to achieve continued business growth. Intuit (2007) predicts that almost half of U.S. businesses will be involved in global trade by the year 2018.

Today, U.S. companies' growing participation in global markets is one of the bright spots in the national economy. U.S. exports and earnings on foreign investment are booming as the housing and financial sectors at home continue to falter. While the economy as a whole has slowed dramatically, exports of goods and services increased by 12.6% last year, and earnings on U.S. investments abroad soared by 20%. The expanding opportunity to serve foreign markets has allowed U.S. companies, including small businesses, to better survive these dismal economic times (Griswold, 2008). Experts agree that exporting to foreign markets is crucial to the economic health of America. Increased exports translate to business growth and business growth means larger profits for U.S. companies - all of which ultimately will result in more jobs for American workers. It is critical for U.S. small businesses to think globally now and in the future.

© 2008, ProQuest LLC. All rights reserved.

Information for this Discovery Guide taken from the new ProQuest Entrepreneurship Database.

The database includes scholarship, news articles, business plans, videos, charts, graphs, and more! ProQuest Entrepreneurship includes content from top providers of entrepreneurial information such as eClipsNet, John Wiley & Sons ("For Dummies" book series), BizMiner, New Strategist, Vator Inc., Direct Marketing Association, Snapshots, Hoovers and many other sources.

List of Visuals

References

  1. Buchanan, Leigh. Gone Global. http://www.inc.com/magazine/20070401/ Downloaded August 2008

  2. Czurak, David. Exporting Risk, Grand Rapids Business Journal. Grand Rapids: July 2, 2007. Vol. 25, Iss. 27, p. B4.

  3. DeBaise, Colleen. Going Global: Businesses Earn More by Exporting. http://smsmallbiz.com/marketing Downloaded August 2008

  4. Delaney, Laurel. The World is Your Market: Small Businesses Gear up for Globalization. http://www.globetrade.com/articles.htm Downloaded August 2008

  5. Exporting Basics. http://www.smallbusiness.com/index.php?title

  6. Exporting Process Complicated, So Seek Help from Professionals, Corpus Christi Caller-Times. Corpus Christi, Texas: Aug. 28, 2007, p. D1.

  7. Five Basics You Need to Know to Play in Today's Global Market, Principal's Report. New York: Sept. 2007. Vol. 07, Iss. 9, p.1.

  8. Griswold, Daniel. Opening the World of Export Opportunity to U.S. Small Businesses. http://www.freetrade.org/node/885 Downloaded August 2008

  9. Intuit Future of Small Business Report. http://www.intuit.com/futureofsmallbusiness/ Downloaded August 2008

  10. Kilkenny, Salome. Accessing Foreign Markets, Network Journal. New York: April 2008. Vol. 15, Iss. 6, p. 28.

  11. Koch, John. Integration of U.S. Small Businesses Into the Export Trade Sector Using Available Trade Finance Tools and Resources: Part 1, Business Credit. New York: Oct. 2007, Vol 109, Iss. 9, p. 66.

  12. Recklies, Dagmar. Small and Medium-sized Enterprises and Globalization. http://www.themanager.org Downloaded August 2008

  13. Small Business Heyday Predicted, The Practical Accountant. Boston: Apr. 2008. Vol. 41, Iss. 4, p. 6.

  14. Trembley, Cindi A. Commentary: Internet Resources for Global Business Practitioners, Daily Record. Rochester, NY: Apr. 22, 2008.

  15. Wall, J.K. As Barriers Drop, Even Small Firms Go Global, Indianapolis Business Journal. Indianapolis: June 25, 2007, Vol. 28, Iss. 16, p. A8.

  16. Wiersema, William H. Beating the Big Guys, Electrical Apparatus. Chicago: Aug. 2007, Vol. 60, Iss. 8, p. 36.