May 25, 2019 | 04:25 AM

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25.07.2013The Single Strategy That Can Raise Your Profits By 10 Percent

Now there's a new impetus for giving it a serious try: Greater profitability.

Elaine Pofeldt , Forbes.com

Most American entrepreneurs know they should be finding ways to branch out into overseas markets. And some are plunging into doing it. In 2012, exports reached a record high of $2.2 trillion, up from $1.58 million in 2009. But others keep putting it off, because they don’t know the best way to go about it.

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Now there’s a new impetus for giving it a serious try: Greater profitability. A new study shows that in the Northeast, the most globally-oriented companies have profits that are, on average nearly 10% higher than their peers. More globally diversified businesses also saw less volatility in their profits than their more domestically oriented cohorts. The study, performed by the Economist Intelligence Unit and sponsored by the global bank HSBC, looked at the period from 2007 to 2012.

The sample included a high percentage of healthcare companies, but other industries, such as consumer goods and industrial products were represented.

So how do the rest of us join them? It’s not as simple as heeding the standard advice to enter the economies you see your clients breaking into.

“`Follow your customers,’ is an easy thing to say,” notes Paul Cronin, Executive Vice President, Northeast Corporate Banking, for HSBC Commercial Banking. But it’s not easy to envision how to actually do it if you run a very small business.

Here are some  tips for diversifying your customer base.

Choose the right market. You don’t necessarily have to venture far from the U.S. to export. “Canada is the number one export market for the U.S.,” Cronin notes. For other ideas, here is the list of the top trading partners of the U.S.

Look at what your competitors are doing. Those who are exporting successfully probably won’t want to give their strategies away, but you’ll have many opportunities to observe them in the marketplace as you run your own business.  ”Leverage what they’re already doing in terms of establishing a demand for American products overseas,” Cronin advises.

Get government help. Some countries have programs designed to help you navigate their system, Cronin notes. If you’re looking for a place to learn the basics, try Export.gov, a site managed by the International Trade Administration. The site lists various agencies that help U.S. based exporters enter various countries.

Figure out how to accept payments. Shop around for a bank that has a presence in the country where you want to do business and can advise you on how to avoid banking mishaps,  foreign exchange risks and the like. “You don’t have the same legal systems,” notes Cronin.

All this can take time, but, as this study shows, it can pay off. And it’s a good long-term strategy. According to Export.gov, nearly 96% of the world’s consumers live outside the U.S.

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