Why global trade is within reach for small and mid-sized businesses

Small and medium-sized enterprises (SMEs) are driving more of North America’s export activity than ever before. According to Global Affairs Canada, SME export participation rose from 10.4% in 2011 to 12.1% in 2020. Across the U.S., small businesses account for about one-third of all known exporting firms, supplying goods and services to over 200 markets worldwide. This international activity isn’t happening in a vacuum, either.

As Rupert Lee-Browne of the Forbes Council puts it, “small and medium businesses are driving economies across the globe.”

But here’s the truth: expanding into global markets isn’t easy, by a long shot. SMEs grapple with a mix of logistical, regulatory, and financial hurdles – not to mention trade disputes. Thankfully, for SMEs, understanding global rules and available support resources can make international expansion far less intimidating.

The good news? North America has begun to invest heavily in training, upskilling, and advisory programs. These resources are helping Micro, Small, and Medium Enterprise (MSME) exporters enter new markets. Read on to learn how SMEs can turn global trade challenges into new and exciting growth opportunities.

Small Businesses Are Making a Huge Impact Across North America

The North American economy is powered by small businesses. Over 99% of Canadian businesses are small or medium-sized, and 99.9% of all American companies are small. Although mega-enterprises tend to dominate the headlines, SMEs (especially micro-firms with less than 10 employees) are making more and more headway in the world of international trade.

Canada’s Growing Export Engine

Canadian small businesses have steadily expanded their global footprint. Per this Government of Canada resource:

• SMEs generated over 53% of Canada’s GDP from 2015 to 2019.
• SME export intensity rose from 3.5% to 5.0% over the last decade.
• The strongest SME export industries range from manufacturing and professional services to transportation and wholesale trade.
• Micro-firms (1–4 employees) are the fastest-growing group of new exporters.
• Service exports have jumped sharply; by 2020, 62.4% of SME exporters were selling their services abroad.

The U.S. Picture

U.S. small businesses export in different patterns but show similar momentum:

• Roughly 97% of U.S. exporters are small businesses, according to the U.S. International Trade Administration.
• MSMEs generated over $542 billion in export value in 2021.
• More SMEs are exploring markets beyond the United States–Mexico–Canada Agreement (USMCA) region, particularly in Asia, Europe, and South America.

Deputy Assistant Secretary for the U.S. Commercial Service, Bradley McKinney, says the America First Trade Policy has helped create “opportunities for U.S. businesses, especially small businesses, to sell their products and services around the globe.” And specific to Canada, the WTO’s Joint Statement Initiative has been instrumental in modernizing trade rules, boosting transparency, and alleviating the administrative burdens on smaller firms.

Together, Canadian and American SMEs are reshaping what North American trade looks like; it’s more digital, more diversified, and more resilient overall.

The Main Challenges Small Businesses Face When Going Global

Even though SME’s global trade influence is apparent in the U.S. and growing in Canada, SMEs still face formidable barriers when entering international markets. Some of the most common obstacles include:

1. Regulatory Complexity

Each country has different trade rules, certifications, labeling standards, safety requirements, and documentation procedures. For SMEs with very limited staff and resources, it can be highly difficult to keep up. Regulatory issues and violations can have several negative effects:

• Slow shipments
• Increased trade-related costs
• Problems entering new markets

The World Trade Organization (WTO) sums this up in an informative briefing: “Small firms are less resilient to regulatory changes, have less resources to adapt, are less able to absorb the costs of administrative requirements, and cannot spread these costs across a larger cost base.”

2. Access to Financial Backing

Exporting requires working capital for expenses like production, shipping, compliance, and insurance, all of which are essential for successful international trade.

Considering the general business climate, smaller firms often struggle to secure trade financing, especially when selling to new or unfamiliar markets. Many of these companies are simply trying to stay afloat in their home market.

3. Limited Market Intelligence

Many SMEs don’t have the time, resources, or specialized expertise to navigate the complexities of international trade. Specifically, they often struggle to:

• Analyze market demand: Figuring out what will sell and at what price can be tricky without in-depth research into foreign markets.
• Find distributors or agents: Finding and collaborating with dependable local partners is a challenge, but it’s a must for smooth operations.
• Assess risks: Shipping delays, currency swings, and other risks are rife in global trade, and the uncertainties can be paralyzing.
• Understand cultural or legal differences: Missteps in global regulations, labeling, or business etiquette can cost a business dearly.

Attempting to export goods or services without this knowledge can result in:

• Missed compliance deadlines
• Rejected shipments
• Poor partner choices

These missteps not only eat into profits but can also damage a company’s reputation and delay its ability to scale internationally. Over time, repeated mistakes can completely stall growth and make global expansion exceedingly risky.

4. Logistics and Supply Chain Management

International shipping can be incredibly complex, and many SMEs are ill-prepared for its intricacies. To get products from point A to point B, firms have to navigate customs procedures, Incoterms, insurance requirements, warehousing options, and return policies that vary widely by country.

For companies that have grown accustomed to domestic operations, keeping track of each of these moving parts can be overwhelming. In addition to that, mistakes can lead to higher costs, frustrated customers, and various other negative effects.

5. Trade Disputes and Geopolitical Uncertainty

Disputes over tariffs, subsidies, and market access aren’t uncommon in international trade situations. They often disrupt supply chains, raise costs, or force companies to tweak their export strategies. On-the-fly changes can hit smaller firms harder since they have fewer resources to absorb sudden shocks.

The reality for small businesses may be sobering, but these obstacles are highly navigable with the right support.

Resources Available to Small Exporters

North America has built an extensive ecosystem of programs to help SMEs build global capability. Here are the most important categories and where to find trusted support.

Training Programs

These programs give SMEs the foundational skills they need to navigate global markets.

• FITTskills International Trade Training. Globally-recognized online courses that let you learn essential international business skills at your own pace.
• Trade Commissioner Service (TCS) Learning Hub. Offers free courses, webinars, and market intelligence on exporting basics, trade agreements, cultural considerations, and industry-specific opportunities.
• U.S. Commercial Service Webinars and Bootcamps. Covers export readiness, e-commerce, documentation, customs, and compliance.
• Small Business Administration (SBA) Export Training in the U.S. Includes step-by-step export planning modules, plus sector-specific sessions.

Upskilling and Digital Tools

When small businesses continually refine their skills and employ the right digital tools, they can operate with far more confidence in global markets. Start with the following:

• Canada Digital Adoption Program (CDAP). Helps SMEs implement digital tools, automation, CRM systems, and e-commerce stores.
• Export.gov’s Market Research Library. Grants free access to country reports, sector guides, and opportunity analyses.
• ITA Digital Strategies for Global Sales. Educates users on cross-border e-commerce, online marketplaces, and digital marketing.

These tools make exporting more accessible and predictable, reducing operational barriers that stand in the way of international business for SMEs.

Consulting Services and One-on-One Support

SMEs perform best when they have advisors who understand their industry, target markets, and risk profile. These consulting and support resources can be a tremendous help:

• Trade Commissioner Service Advisors. Deliver matchmaking, market entry guidance, local introductions, and trade mission opportunities.
• EDC Export Advisors. Offer consulting on financing, insurance, cash-flow planning, and buyer risk assessment.
• SBA Export Assistance Centers (USEACs). Provide hands-on help with regulations, financing, and export planning.
• Provincial Trade Promotion Organizations. Deliver localized guidance, mentorship, and industry-specific expertise.

Whether you train digitally or in person, advisory services help to propel MSMEs from intention to action.

Get Started in the World of International Trade

Exporting is no longer reserved for massive corporations with deep pockets and global networks. SMEs across North America are expanding into new markets at a growing pace, supported by stronger training programs, more accessible advisory services, and a steadily improving export ecosystem.

If you’ve been thinking about international expansion, now is the time to take the first step. Start out small:

• Take a FITTskills course.
• Book a call with a trade advisor.
• Explore one new market using government-provided market data.
• Pilot a single product or service internationally.

The global marketplace only gets broader with time. With solid know-how, professional support, and confidence, MSME exporters won’t just participate – they’ll thrive.