Exporting By Accident
What are the biggest challenges facing small businesses that want to export? A panel explored this eternal issue during Small Business Week in Washington back in May. According to the U.S. Department of Commerce, most SME companies that export have no particular export plan or strategy, getting into exporting more or less by accident – responding to inquiries from overseas markets. (This, I suspect, is partially due to the Internet. Every company is in international marketing as soon as they put up a website, but few seem to expect that anyone outside their home market will ever notice. Then they are surprised to receive an inquiry from some place they have never heard of.) Commerce also says that 58% of small American exporters sell only to one foreign market (usually Canada or Mexico) – and most of those sell only to one customer in that market, further increasing my suspicion that this is exporting by accident.
Call your local USEAC
What are the challenges these small companies face to growing their exports? The Small Business Week panel was composed of some of the winners of the Small Business Administration’s exporter of the year awards, and all had succeeded in growing their international business. In no particular order, the challenges they faced and mastered include: (1) selecting which new markets to try and figuring out how to sell in those markets; (2) access to capital, seemingly common to all small businesses these days; (3) dealing with complex paperwork; (4) figuring out how to comply with foreign regulations; and (5) achieving clarity in communications in other languages and cultures. The U.S. Commercial Service can help with each of these, except for access to capital – and SBA may be able to help with that. One-third of American SME exporters have never heard of any of the U.S. Government’s export assistance programs. That means that two-thirds of small U.S. exporters have heard of the USG programs! Frankly, I’m surprised and impressed, since the agencies trying to help exporters are not given budgets for their own advertising and marketing.
So, what did the winners of the exporter of the year awards have to say about meeting and overcoming the challenges? Dan Nanigian, president of Nanmac Corporation in Framingham, Massachusetts, says that you have to make sure you have quality products and then market “the hell out of them.” Scott Green, CEO of Pucker Powder in Alabama, says his company maximizes their use of Commercial Service programs, working with their local U.S. Export Assistance Center. Green is particularly enamored of the Gold Key program, which, he says, is growing exports to more than half of Pucker Powder’s sales. Other winners pointed out the importance of overseas trade shows, maximizing face-to-face contact and developing the contacts made at trade fairs. Some emphasized multilingual company websites, too.
“The cultural barriers—even with English speaking countries such as the U.K. and Australia—are enormous,” noted Amy Frey, president of ATC International. “You have to be incredibly clear about … different measurement systems and time and date conventions.”
Plenty to think about.
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I thought about outrigger paddling on Sunday. Our regatta this weekend was at Maile, out on Oahu’s Waianae coast. Beautiful broad beaches, bright sun and intense competition. I had mixed results: I sat #2 in two crews, the paddler who calls the changes from side-to-side. Our men’s 60s crew finished 5th and should have been better. We did well with the mixed (men and women) 60s, taking 3rd place. Next weekend, we’re racing in the surf at Waikiki.
