Getting Started March 19, 2010, 10:50AM EST

The Biggest Roadblock to Upping Exports

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David Old is counting on foreign sales to go from $1.25 million in revenue this year to $20 million in three years.

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Hochberg says Ex-Im is focusing on a handful of countries that are developing quickly, growing in infrastructure, and where the bank can help finance purchases: Mexico, Colombia, Brazil, Nigeria, South Africa, Turkey, India, Vietnam, and Indonesia. The SBA also offers export loan assistance and technical support at export assistance centers.

Foundation for Success

A prerequisite for selling abroad is success at home. Laurel Delaney, a Chicago-based consultant to small businesses seeking to export, says the typical company ready to expand overseas has $1 million to $15 million in revenue, a track record of growth, and the staff to handle new business abroad. Online marketing and e-commerce have also enabled more small businesses to expand globally. Shipwire, a Palo Alto (Calif.)-based company that provides outsourced warehousing and shipping for online merchants, opened warehouses in Canada in 2007 and in the United Kingdom in 2008, in addition to three warehouses in the U.S. Shipments to non-U.S. addresses have gone from close to zero in 2007 to 20% of Shipwire's business in 2009, says CEO Damon Schechter. "The merchants are pulling us to where we should be," he says.

Still, David Old's story shows why many small businesses are wary of selling abroad. Old had an insurance policy that guaranteed payment as long as he shipped in the period covered by his customer's letter of credit. During the financial crisis, however, as the value of the Korean won plummeted against the dollar, his buyer asked him to hold off on sending the last part of the order until the exchange rate recovered. Old says he trusted the buyer because he had made the earlier payments. By the time he shipped, the letter of credit had expired, along with his credit insurance. "I don't think the guy was a crook. I think the global economic collapse probably bankrupted him," Old says.

That experience isn't stopping him from looking abroad for new sales. He has prospects right now in Israel and Pakistan, and he's learning to speak Urdu. Old wants to grow his woodblock flooring business exponentially in the years ahead, and nearly all of that growth he sees coming from abroad. "The ability to access international markets via a simple thing called a container is huge," he says.

Tozzi covers small business for BusinessWeek.com.