Small Businesses Use Weak Dollar to Globalize

A wide range of small businesses in the U.S. are beginning to take advantage of weak U.S. dollar’s exchange rate to market their products to Europe and Latin America. “We are hearing about the credit crisis every day, but we are not hearing enough about how the weak dollar is a good thing for business,” Raphael Amit, a professor of entrepreneurship at the Wharton School at the University of Pennsylvania, told The New York Times. “It is one of the things that will help prevent a recession. When the dollar is weak, imports are more expensive. So relatively speaking, domestic production and services are more competitive. Simple as that.”

Amit said that falling interest rates can create an ideal climate for small businesses.

“As interest rates go down, manufacturers can take out loans and use that money to finance the purchase of raw materials and capital equipment,” he said.

New York investor relations boutique MBS Value Partners attributes a rise in interest from potential clients in Europe and Latin America to the state of the dollar.

“It used to be just the richest people coming to shop, and now it’s everyone,” said Lynn Morgen, a founder of MBS Value Partners. “Well, it’s the same for us. We are now hearing from midsize European companies, which in the past might not have had the budget to hire a firm to help gain additional visibility within the U.S. financial and business community. So we are seeing both an increased amount of interest from foreign companies, and that demand is coming from new segments of the marketplace.”

By the time the dollar stabilizes, her company should be in firm standing, Morgen said.

“We look at this as a great opportunity to open a door,” she said. “We are confident that once the door is opened, we’d stay put for the long term.”