Businesses across the commonwealth are seeing a growing demand for Kentucky-made products. With the commonwealth accounting for more than $34.4 billion in exports in 2022, a 16.5% increase over 2021, Kentucky businesses are finding success in today’s global market.
The State Trade Expansion Program (STEP) is helping these businesses grow and find success in international markets. In September 2023, Gov. Andy Beshear announced the U.S. Small Business Administration (SBA) awarded the commonwealth $400,000 to help more Kentucky companies export.
The grant program, which is marking its 11th anniversary of funding small-business growth, provides companies with the information and tools needed to successfully sell their products and services worldwide. Within five years, the goal is to have a STEP company located in all of Kentucky’s 120 counties.
“This funding and the support of Kentucky’s STEP program will help many more great companies write their success stories right here in the commonwealth,” Gov. Beshear said. “The vast majority of exporters in Kentucky are the kinds of small and medium-size businesses that drive our economy, and STEP has allowed them to grow, provide quality jobs the commonwealth and reach an international consumer base. STEP is a critical program for Kentucky and its economy, and I am thrilled to see it continue making an impact in year 11.”
Eligible Kentucky businesses may receive up to $10,000 in reimbursement grant funding for year 11 of the STEP program. Companies can begin the application process now by visiting kyexports.com.
A wide range of activities are supported by STEP including training and workshops for export readiness, U.S. Department of Commerce user service, website development, trade missions, foreign market sales trips, design of international marketing media, exhibiting at trade shows with international audiences, compliance testing, export credit insurance premiums and much more. Since its inception in 2011, Kentucky STEP has awarded $3.1 million to more than 235 businesses across the state. With 95% of the world’s consumers and two-thirds of all purchasing power located outside the U.S., this grant program plays a critical role in providing access to capital, access to markets and access to buyers.
“STEP funds should be seen as an exciting opportunity to become part of a big, new world,” said Mary NeCamp, Kentucky’s STEP director. “Exporting is proven to help businesses increase profits, while making them more resilient by creating diverse revenue sources. STEP can help companies from across the state realize those benefits by introducing their products and services to customers around the globe. The training and education components of Kentucky’s STEP program also equip businesses to successfully navigate challenges that may come with exporting. Reimbursement through STEP gives business owners the tools to bridge the gap between domestic and international markets and receive expert assistance through partner organizations. We look forward to helping eligible businesses in all 120 counties to capitalize on the immense opportunities.”
The guidelines of the Kentucky STEP program are implemented to carry out the missions for which it was designed by the SBA and administered by the Cabinet for Economic Development. Namely, to assist and grow Kentucky’s and the nation’s small businesses by providing financial assistance and resources for exporters. Growth is measured by the number of jobs added due to the success of sales generated in other countries. While this is not often achieved overnight, ultimately, job creation it is the long-term goal. Return on investment (ROI) is another important consideration. Participating in export development activities that will reap business relationships and contracts, even if not immediately, has shown to lead to stability and growth for companies.
To set businesses up for success, STEP Year 11 seeks to help new-to-exporting firms by initially requiring they spend their awards on export training, website development and design of marketing media. After those activities have been completed, compliance testing, shipping samples, traveling to exhibit at trade shows and meeting with buyers is encouraged. Once businesses are admitted into STEP, they are expected to use their funds expeditiously as reimbursements are made on a first-come, first-served basis. Businesses looking to expand markets are welcome to spend funds as they see fit with travel approved in advance.
In Kentucky, STEP has served as a leading example of how a state can partner with companies to expand and enter new markets. Since the program was established, the commonwealth has established itself as a major player on the global stage. In 2022, Kentucky companies exported $34.5 billion manufactured products an uptick of 15.7% over 2021. The latest data shows Kentucky exported $7.8 billion of services in 2021.
“The STEP grant has enabled me to meet with the academic researchers that are driving fashion technology. I was able to make excellent connections and formed strong relationships with people who are making decisions for how fashion technology is taught and where research dollars will be spent,” said Susan Spencer, founder and CEO of Paducah-based Seamly Systems. “I believe the STEP grant has enabled me to make connections that will grow my business exponentially. I met with many program directors for EU funding distribution channels, industry 3D scanner CEOs and developers. This was an exciting event, and combined with our previous trip to London it reveals how the current fashion software industry and 3D body scanner providers are truly not listening to their customer's needs. This enables us to know we have a great product-market fit and there's additional huge opportunity in this space with lots of pent-up unmet demand.”
Basic eligibility requirements should be that a for-profit, Kentucky-based business has been operating for at least one year and is capable of taking on the burden of exporting. Not all industry sectors are eligible to participate in the STEP grant program, especially those in the service sector. Businesses must have exportable products or services and have a chance at succeeding overseas by meeting certain criteria for growth. STEP is geared toward businesses in the growth phase rather than the startup phase, that meet the federally defined criteria of a small business and will export products that are at least 51% U.S. content.
Anyone interested in applying for STEP Year 11 is encouraged to visit kyexports.com for the application and other valuable sources of information for exporters.
As of 2022, Kentucky was home to more than 360,000 small businesses that employ 716,000 people. That represents approximately 99.3% of all companies in the state. Small businesses have made significant contributions to Kentucky’s record economic success, and STEP has taken that momentum to new heights.
The continued success of the program is reflected in Kentucky receiving awards in each of the last 11 cycles. Those resources have helped companies gain exposure on a global scale, while also raising awareness of Kentucky-made products.
“International business and exporting have always been an interest to me but seemed daunting in our last business. Everywhere I turned I experienced roadblocks, so we relied on outside consultants and freight forwarders to process paperwork and missed out on several opportunities,” said Michelle Pandow of Caliber Armor, a Louisville-based body armor manufacturer. “Being able to exhibit and show our products would not have been possible without the funds made available by the STEP grant. Exporting has increased our sales by 10%, and in July, we hired two full-time employees to allow more production and for me to be able to focus on export expansion. As a woman-owned business in a primarily male-dominated sector, I am proud to not only bring our life saving products to the men and women that help keep our country and communities safe but also to be a globally recognized brand.”
STEP also aligns with the Kentucky Export Initiative (KEI). Through KEI, the cabinet partners with a coalition of agencies and organizations to streamline and promotes the state’s efforts to help Kentucky businesses reach global markets.
For more information, or to apply for STEP funding, visit kyexports.com/step-grant. Email completed applications to STEP Program Manager Mary NeCamp at mnecamp@ky.gov.
KY Innovation, part of the Kentucky Cabinet for Economic Development, connects businesses across the commonwealth to the services, capital and collaborations they need to start, scale and thrive. That includes resources like expert entrepreneurial mentorship, commercialization support, SBIR/STTR matching funds, access to capital programs, export assistance and more. Visit us at kyinnovation.com.
