EXPORTING 101: SIX KEY STEPS
Small firms can make good money selling their products and services overseas.
Small firms can make good money selling their products and services overseas. The hurdles often appear high, but there are many resources available to help smalls research and select the right markets, find customers, cut through red tape and much more.
Smalls may also find their products have unexpected cachet abroad -- particularly if they work a niche well.Here are six strategies for success -- with examples from firms that have put them to good use. The slide show begins with the navigation bar to your right.
EXPORTING 101: STUDY THE CULTURE
If you try to approach the market with the attitude that what works in the U.S. will work everywhere, you're sure to come off as arrogant and will alienate potential customers. And distinctions may be more subtle than they first appear. Here's what York Wallcoverings discovered:
"We're in the fashion business with wallpaper," says P.J. Delaye, chief operating officer of the York, Pa. firm's RoomMates Division." First, we said 'Let's just sell to one pan-European distributor.' But we had to backpedal a bit because we learned that [a single] Europe of color and design doesn't exist. The French like different colors and patterns than the Germans, and both like different ones than Italians and Brits. So we went in the opposite direction. We had to go more national than pan-European."
In addition to European markets, York also expanded greatly in exports to Asia, especially China, and currently, overseas sales account for more than 10% of total sales.
EXPORTING 101: GOVERNMENT HELP
Small firms are often unaware of the resources available to them from government and public-private agencies -- or suffer from a disinclination to go to the government for help.
Don't hesitate, says Martin Park, president and founder of Mommy's Helper Inc., a Wichita, Kan. maker of baby products. "What it gets down to is people don't know how to ask, because they're afraid to. People are afraid of sounding stupid. My God, people, this is our livelihood. The folks at World Trade Centers don't think you sound stupid. You know why? Because if they can help you, they report it back to their bosses and they look like heroes."Some resources:
Talking is important, not just as a way of developing potential customers but also to find trustworthy sales representatives and distributors for your products and services overseas or partners in overseas markets.
And, of course, there's no substitute for face-to-face contact. Suresh Madhavan, the CEO of Houston's PointCross Inc., joined a trade mission to Mexico led by Texas Governor Rick Perry.
"This enabled us to learn the business, show our face, show that we were coming with appropriate bona fides, that we were not only a legitimate company but could bring proper references." About 90% of the firms' business is now export-oriented, Madhavan says.
EXPORTING 101: FOLLOW THE CUSTOMER
Going abroad is one way to head off or compensate for potential loss of domestic business to overseas competitors.
When Enduro Systems Inc. a Houston, composite-material building component maker, found its customers moving abroad, it had to find ways to supply them overseas. "At the end of the day, it's still just stuff," says Walter C. Greig, Enduro's president. "They're not going to NOT build a million dollar feed mill because they can't get our stuff."
Enduro has set up a plant in China and says about 35%-40% of its business is now international.
There ARE hazards out there: tariffs and nontariff barriers, intellectual property crime, weak infrastructure and other obstacles that could hamper your ability to sell in a particular market.
For BG Products Inc., which makes automotive chemicals in Wichita, Kan., the biggest problem with overseas sales is protecting its intellectual property. "The more you get into some of these countries, the more you have to deal with copycat products and trademark infringement," says Galen Myers, BG's president and chairman. "Some of these countries seem to be more of problem than others. Some we've had exports to for years without problems, while with others it's a constant fight."
With limited resources, it's best to concentrate on developing one or two new overseas markets at a time. And bear in mind that breaking into any market abroad can be a time-consuming process.
"Take it step by step," says Scott Hamberger, managing director of Fortessa Inc., a Sterling, Va. maker of tabletop goods and accessories aimed at the high end of the market. "It's impossible to do all things at once and do them all well."
