Rajant shows how small businesses can export
The Malvern technology firm generates three-quarters of its revenues from end-users outside of the United States.
It's been a year since President Obama set a goal of doubling the nation's exports by 2015.
That would mean going from $1.57 trillion in exports in 2009 to $3.14 trillion five years later, which would be phenomenal unless we double imports at the same time.
However, it's also unlikely to happen without more small businesses jumping into global markets. After all, how many more Boeing 737s, John Deere tractors, and Caterpillar backhoes can the world absorb?
According to the Small Business Administration, just one out of every 100 small businesses sells products and services outside U.S. borders. You can imagine why. Language, culture, distance, financing, currency - all present significant hurdles to tiny firms.
But when exporting works for a small company, the results can be dramatic. Rajant Corp. , of Malvern, generates about three-quarters of its annual revenue from exports, according to Robert J. Schena, its chairman and chief executive officer.
As a private company, Rajant doesn't disclose its annual sales, but Schena said that they were more than $10 million, and that sales had grown at about 40 percent per year for the last six years.
Rajant makes wireless mobile-communications networks used by the U.S. military, mining companies, emergency personnel, and other customers. However, Schena disabused me of thinking that the company's entrance into exporting was by design. Rather, an executive with a mining company saw Rajant's BreadCrumb network operating in a military setting and thought the technology could be useful in the rough terrain where miners operate.
Today, Rio Tinto Group, Newmont Mining Corp., and Peabody Energy Corp. are among the mining companies that use Rajant technology in Australia, Canada, Mexico, and elsewhere around the world. "That's a truly global industry," Schena said. "The scale is so immense."
Nearly nine years old, Rajant itself was tiny, with just 35 employees. One is the company's international-trade officer, a position it has had for about four years, Schena said.
Exporting is challenging. Trade regulations are complex. Thorough background checks of potential trading partners are a must, especially for Rajant, where the U.S. military is a key customer. Schena said the company simply cannot allow its wireless products to be used in a fashion that might jeopardize U.S. soldiers.
One sign of how adept Rajant has become at exporting: In less than a week, Schena will be headed to India as part of a trade mission organized by the U.S. Department of Commerce and being led by Commerce Secretary Gary Locke.
More than half of the 24 companies going are small and midsize firms. The delegation also includes giants such as Boeing Co., Exelon Nuclear Partners, and Lockheed Martin Corp.
Schena called the trade mission a "wonderful opportunity for us," enabling him to meet with Indian government officials because of the doors opened by the Commerce Department. Plus, the journey coincides with Aero India 2011, a big defense-industry show in Bangalore that Schena will attend.
Rajant's experience is the kind of export success that Linda Conlin, president of the World Trade Center of Greater Philadelphia, said she thinks other small companies could replicate, especially with the new federal emphasis on boosting exports.
For example, the Export-Import Bank of the United States just launched its Global Access for Small Business initiative, which will provide new export financing and insurance. Fred P. Hochberg, chairman and president of the Ex-Im Bank, will talk about it as keynote speaker at the World Trade Center's Global Business Conference 2011 in Philadelphia on Feb. 9.
Financing is a big hurdle facing small companies that want to export. New federally sponsored programs and increased awareness of the export assistance available, such as through Pennsylvania's Center for Trade Development, should help more U.S. companies get their products into fast-growing emerging-market countries, Conlin said.