Just in time for International Women’s Month (2016), the Women-Owned Small Business (WOSB) office of the US Small Business Administration (SBA) announced that it had, for the first, time, broken the 5% target for federal government contracts awarded to women-owned small businesses (WOSBs). Kudos to Erin Andrew, who leads the SBA’s Office of Women’s Business Ownership, and her team.
$17.8 billion – equal to 5.05% – of federal government contracts were awarded to WOSBs in FY 2015. The US federal government market is worth over US$360 billion.
This information made me wonder –
What is the size of the global market? Merchandise exports from WTO members totaled US$ 18.0 trillion in 2014. In the same year, exports of commercial services from WTO members totaled US$ 4.87 trillion. (WTO International Trade Statistics 2015). According to the Global Entrepreneurship Monitor (GEM) 2014 Special Report on Women’s Entrepreneurship, going global allows women entrepreneurs to access larger and more diverse markets.
What % of women entrepreneurs are tapping into this market? The GEM Reports on Women have stated that, across the board, female entrepreneurs are less involved in international trade than their male counterparts. In the United States, for example, 15% of women entrepreneurs stated that at least 25% of their customers were from outside of the United States (2014 data). The gap between men and women involved in international trade is greatest in the developed economies.
Meanwhile, entrepreneurs and businesses that export achieve higher returns than those who focus on their domestic market. In the United States, for example, average receipts for women-owned exporting firms were $14.5 million while the average receipts for women-owned non-exporting firms was only $117,036, according to this report on The Story Exchange.
What does it take to successfully access global markets? The three T’s:
Technology: If you have a website you are marketing your company to the world. Today’s pervasive technology also facilitates access to such information as where to look for your next foreign business opportunity.
Trade Agreements: Hundreds of trade agreements are in force around the world. Trade agreements can reduce import tariffs and taxes, remove quotas and other trade barriers, and harmonize the laws and regulations of the trading partners. As a result, the costs of importing and exporting goods around the world are being reduced and new and accessible markets are being created for goods and services.
Trade Financing: When doing business with a partner half-way around the world, trade financing provides insurance that minimizes the risk that you will either not be paid or not receive the goods for which you have paid. The World Trade Organization (WTO) has indicated that 80% to 90% of world trade relies on trade finance.
The three T’s – Trade Agreements, Trade Financing, and Technology — provide the doors for WOSBs and other small businesses to access global markets. Contact us to learn more.