Breaking into the global marketplace
Like many small entrepreneurs, you may think tackling
global markets is better left to the corporate giants of the world.
After all, Asia might as well be Mars as far as you're concerned.
But before you write off going global, consider this:
By the year 2010, China is expected to have 149 million middle-class
chief economist for the Long Island Association.
If you're not taking advantage of these potential markets, she says, you
could be missing out.
"These are growing economies, and will be a fertile market for many of our
high-end business services and consumer products," she notes.
In fact, many small businesses are already tapping into these markets.
During fiscal year 2006, small businesses exported a record $375 billion, more
than $1 billion a day, according to the U.S. Small Business Administration,
which doled out more than $1 billion in export-assistance loans that fiscal
Still, breaking into the international marketplace is easier said than
done. There are many rules and regulations and plenty of opportunities to fail
if you don't do your homework. That's why it's best not to go it alone, experts
"It's not easy," says Patti Stoff, managing director of the Bellmore-based
Long Island Import Export Association, which holds monthly seminars on
international issues. "You need to be educated."
To be sure, there are plenty of resources to help get you started. It pays
to check out
export.gov and buyusa .gov/home/export.html for some of the basics.
In addition, the U.S. Department of Commerce's Long Island U.S. Export
Assistance Center (buyusa.gov/ longisland) offers free export counseling to
local companies, according to director Shakir Farsakh. The center, temporarily
housed in Manhattan, will be opening a Long Island office by the spring.
Through the center, you can tap into export assistance programs, including
one that connects local businesses with potential customers and distributor
contacts that are cleared by the government as legitimate interested parties,
Farsakh says. The program is fee-based and costs between $700 and $1,100.
Other local resources include the National Institute for World Trade in
Cold Spring Harbor, the Hauppauge Industrial Association and the Long Island
Association (both have trade committees), and the Long Island Forum for
Technology in Bay Shore. (The latter, known as LIFT, in conjunction with the
U.S. Commerce Department will hold a two-day seminar on export regulations June
27 and 28 at the Hilton Long Island in Melville.)
These types of programs and services are extremely helpful for newcomers,
notes Peter Melerud, director of business development for international sales
for Kemp Technologies in Bethpage.
With the help of the Export Assistance Center, Kemp was able to break into
the global marketplace a year ago. Last March, Kemp got a chance to display its
server load-balancing technologies at a trade show in Germany, where the U.S.
Department of Commerce hosted a booth for local companies. Here, it developed
key relationships with several resellers in Germany and other parts of Europe.
Kemp also worked with U.S. Department of Commerce contacts in the United
Kingdom to help make introductions to resellers and distributors in that
marketplace. International sales now represent about 20 percent of its
business, says Melerud, who advises small firms to be "proactive." "Don't
assume somebody else is going to do it for you," he explains.
You've got to do the legwork, adds Tom Shinick, chairman of US China
Partners Inc., a Garden City-based trade consulting firm. To get started, he
suggests companies develop an international business plan that addresses such
issues as exchange rates, marketing, cash flow, intellectual property
protection and methods of distribution. It's best to start small, preferably
with one country or product.
In addition, you want to talk to your banker about how best to secure
payments on international transactions, notes Laurel Delaney, president of
Chicago-based GlobeTrade.com, which assists companies in going global. One of
the biggest mistakes a company can make is not securing payment before it ships
goods, she adds. "It's one thing to collect payment from the shop down the
block and a whole other matter when your customer is located 12,000 miles
away," Delaney says.
The bottom line: You want to know whom you are dealing with. The best way
to do that, experts say, is to visit the place you will be doing business with.
With today's homeland security issues, you need to ensure that the product
you're selling is actually being used for its intended purpose, says Stoff of
the Long Island Import Export Association, another local resource.
Ideally, you want to meet your customers face to face. So make sure you can
arrange for the time and resources to do the legwork and establish these
It could mean the difference between success and failure.
Send e-mail to Jamie Herzlich at firstname.lastname@example.org