Breaking into the global marketplace

Jamie Herzlich

Newsday columnist Jamie Herzlich Jamie Herzlich

Herzlich writes the Small Business column in Newsday.

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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

households, India 45 million and Brazil 18 million, according to Pearl Kamer,

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

year.

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

say.

"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

relationships.

It could mean the difference between success and failure.

Send e-mail to Jamie Herzlich at jherzlich@aol.com