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EXPORT BASIXS :
HOW TO FIND OVERSEAS MARKETS FOR YOUR PRODUCT OR SERVICE
By Elizabeth H. cottrell, IAHBE Staff Editor
The world has shrunk. In a movement unprecedented in history, Technology—primarily through the Internet—has empowered even home-based entrepreneurs to economically expand their market globally. Opportunity does not come without responsibility, however, and your responsibility as a business person is to learn all you can about exporting from your specific location and then deciding if it makes sense for you to do it. This report will get you started. It is oriented towards the U.S. entrepreneur who wishes to export out of the United States. Information sources for those international business people who wish to export to the United States will be noted.
The main reason to consider exporting is the potential for increasing sales and profits and reducing your dependence on domestic markets. Depending on your line of work, you may find that the development of an international business can offset a lack of demand for seasonal products in the U.S. and lower your per-unit fixed costs. Sometimes, there are tax advantages as well.
International sales have contributed to nearly 30% of domestic economic growth in recent years. While the number of American businesses sending their goods and services overseas has tripled since 1990, two-thirds of that volume has come from companies with fewer than 20 employees. You may enjoy reading some export success stories at www.export.gov/explore_exporting/success_stories.html to see what other businesses have done.
Why Not Export?
As you might expect, exporting has its drawbacks. It requires a significant commitment to learning and understanding the exporting process. Sometimes, there are export licensing requirements, demands on you or your staff for travel, translation considerations, and often the development of new packaging for country-specific regulations, as well as new marketing materials geared for your international market. Exporting is not for the meek or timid.
Understanding the Process
This is the most critical step, because it will help you determine if exporting is something you should consider or not. There are many links in our Sources and Resources sections below to help you find information, but start with these:
A Basic Guide to Exporting
This is an extremely comprehensive guide that begins with evaluating whether exporting is for you and continues through the planning and execution of an export business. It includes financing, payment options, international legal considerations, and tips on conducting business abroad.
Free Export Basics Webcast Seminar
U.S. Government Export Portal
This official export portal helps exporters for domestic and international trade. The Explore Exporting link in the Trade Assistance box is a nuts-and-bolts coverage for beginners. It covers questions such as: "What’s In It for Me?", "Am I ready for this?", "What do I have to do?", and "Will my products sell?" Use their step-by-step, how-to guides, especially "A Basic Guide to Exporting" above.
Do I Need a License?
Happily, licenses are no longer required for all exports. Unless your product involves high technology or weapons, you probably won’t need one. There are two main types of exporting licenses: General and Individually Validated Licenses (IVL). Read the information at the Global Trades Ltd. Website (www.global-trades-ltd.com/exportlicenseinfo.html) to determine if you need a license or not.
Finding an Overseas Market
The U.S. Department of Commerce offers excellent market research resources through its BuyUSA.com Website (www.buyusa.com/cgi-bin/db2www.exe/ trade_assistance/research_markets.d2w/input). If you end up at a Website in a foreign language, look for the English language link in the upper right hand corner. This Market Research link (www.buyusa.com/cgi-bin/db2www.exe/mkt_research/mkt_research.d2w/input##) will take you to other links for Country Commercial Guides that contain detailed information about local business customs, economic trends, and the political climate for that country. Also available for U.S. businesses are world reports by industry and country that can help you determine market potential and identify key competitors.
For international entrepreneurs seeking to learn about export potential in the United States, the U.S. Commerce Department also offers U.S. commercial information by state at this link: www.buyusa.com/cgi-bin/db2www.exe/mkt_research/mkt_research.d2w/input##. Once you click the state you’re interested in, you will see National Industry Reports, U.S. State information, U.S. City and County Information, Trade Events, and much more.
Deciding Whether or Not to Get Certified
If you are manufacturing a product, getting certified by ISO 9000 (International Standardization Organization--www.iso.ch/iso/en/ISOOnline.frontpage) is an important step. This organization evaluates the production process quality control--efficiency, inspection, testing, installation, design, and manufacturing facilities--more than the product itself. Almost all the European countries require ISO certification before you may export goods into their country. Notify the ISO that you’re interested in being certified, and they will explain the process to you. It will involve sending a team to your manufacturing site for an inspection.
The European Union (www.eurunion.org/) also offers a certification that results in your obtaining their CE mark. This has more emphasis on the product than the process. See their Website for details.
Overseas Packaging and Shipping
According to the SBA, the type of transportation used to get the product overseas depends upon the product's characteristics, timeliness of delivery, and cost. Proper packaging and the correct mode of transportation will reduce damage and will get the product to the foreign buyer safely and on time. Considerations include:
Copyrights and Patents
Anyone considering exporting should realize that U.S. copyright and patent laws often do not protect you overseas. The World Intellectual Property Organization (www.wipo.org/), or WIPO, of which the United States and many other countries are members, will reciprocally recognize those who have a patent or trademark or copyright in the United States, but there are guidelines that must be met, and there are filing requirements.
If this issue concerns you, consult someone with expertise in this area. In some parts of the world, a product could be copied in every way except some small detail (like color) without violating invention patents.
Getting Help with Exporting
General export information and development assistance is provided by the SBA (www.sba.gov/oit/textonly/info/index.html). Links found here include trade counseling, training, legal assistance and publications. The SBA’s Office of International Trade has a free book available on their Website called "Breaking Into the Trade Game: A Small Business Guide to Exporting." You can find it here: www.sba.gov/oit/info/Guide-To-Exporting/index.html.
The U.S. Department of Commerce offers a Personal Trade Assistant (www.buyusa.com/cgi-bin/db2www.exe/trade_assistance/prep_intl_trade.d2w/input) program. Your local Export Assistance Center trade specialist can help you determine if you are "export ready" and assist you with the creation of an exporting business plan. Your specialist can also introduce you to a variety of trade tools.
There is a network of U.S. Export Assistance Centers (http://www.sba.gov/oit/export/useac.html), found in major metropolitan areas of the U.S., that provide persoalized service with local exporting for small-and medium-sized businesses.
Many new-to-export small firms have found the counseling services provided by the SBA's Service Corps of Retired Executives (SCORE--www.score.org/) particularly helpful. Through the SCORE Website or your local SBA District office, you can gain access to more than 850 SCORE volunteers with experience in international trade.
Through the U.S. Department of Commerce, the International Trade Administration (ITA--www.ita.doc.gov/) has offices throughout the country where international trade specialists can help you locate the best foreign markets for your products. On its Website, the Trade Information Center link offers country-specific information for exporters.
Cautions for New Exporters
There are some pitfalls that new exporters experience. These are sufficiently common that the Small Business Administration has made a list of the 12 most common mistakes:
1. Failure to obtain qualified export counseling and to develop a master international strategy and marketing plan before starting an export business.
2. Insufficient commitment by top management to overcome the initial difficulties and financial requirements of exporting.
3. Insufficient care in selecting overseas sales representatives or distributors.
4. Reliance on orders from around the world, rather than concentrating on one or two geographical areas and establishing a basis for profitable operations and orderly growth.
5. Neglect of export business when the domestic market booms.
6. Failure to treat international distributors and customers on an equal basis with domestic counterparts.
7. An assumption that a given market technique and product will automatically be successful in all countries.
8. Unwillingness to modify products to meet regulations or cultural preferences of other countries.
9. Failure to print service, sales, and warranty messages in foreign languages.
10. Failure to consider use of an export management company when the firm cannot afford its own export department or has tried one unsuccessfully.
11. Failure to consider licensing or joint venture agreements when import restrictions, insufficient resources, or a limited product line cause companies to dismiss international marketing as unfeasible.
12. Failure to provide readily available servicing for the product.
Develop a Plan!
All exporting advice resources say one thing: an exporter needs to develop an international business plan. A worksheet for developing such a plan is available at www.bizoffice.com/library/files/trad26.txt. Scroll down to the heading International Business Plan and answer the questions that follow. When you finish, you will have the content for an international business plan.
SOURCES FOR THIS REPORT
Interactive Internet TV And Webcasts For International Trade And Business. See the future of international business with globalspeak.com, the world channel of commerce, interactive internet television and webcasts for export, trade and business professionals.
Longini, Peter. "Export Basics Boot Camp." Pittsburgh Technology Council Website: www.imakenews.com/techyvent/e_article000045912.cfm
"Duquesne SBDC Offers Guide to Off-Shore Sales," by Peter Longini. Expanding U.S. exports of goods and services, as well as attracting foreign investment to Southwestern Pennsylvania, are major state and national priorities. As a result, there are a number of organizations in the region offering low-cost or no-cost services designed to help aspiring exporters prepare themselves to succeed in international trade. There are also a growing number of Web-based resources as well as an assortment of professional service firms designed to give prospective exporters the information, advice, and practical help they need to tap world markets.
U.S. Department of Commerce. "Personal Trade Assistant."
The Trade Tools and Trade Assistant menu on this site are very valuable.
U.S. Government Export Portal" www.export.gov/
This resource site helps exporters for domestic and international trade.
U.S. Small Business Administration. "Is Exporting for You?"
More than ever before, it is clear today that world trade is essential to the health of the American economy and to the growth of most U.S. companies. This is especially true for small businesses with the advent of increased foreign competition at home. Entering the overseas marketplace offers exciting opportunities to increase company sales and profits.
Small Business Administration. "Cautions for New Exporters"
The 12 most common mistakes made by new exporters.
U.S. Small Business Administration. "New-to-Export Small Business"
Finding overseas markets, dealing with the initial complexities of exporting, and financing export sales are some of the challenges facing smaller firms seeking to participate in international trade. To help you meet these challenges, the U.S. Small Business Administration offers aid to current and potential small exporters through two major programs: business development assistance and financial assistance. These programs are provided through our network of field offices around the country.
U.S. Small Business Administration and AT&T. "Breaking Into The Trade Game: A Small Business Guide" www.bizoffice.com/library/files/trad26.txt
This Guide will help answer questions and take the mystery out of exporting. The United States government has committed enormous resources to help small businesses, like yours, reach overseas markets.
RESOURCES FOR FURTHER INFORMATION
U.S. Government export portal helps exporters for domestic and international trade.
Information for exporters of U.S. goods and services
Choose an office Website from this list of countries. To find an Export Assistance Center nearest you, see our list of U.S. Offices.
New exporter services: Australia
Austrade and Trade Start offer a package of free services designed to assist small- and medium-sized Australian companies develop their businesses overseas and make their first export sale.
Internet International Business Exchange--Tools for the Global Entrepreneur
International Import Export Business Exchange whose mission is to promote international trade on the Internet by supplying trade leads, government and business opportunities, WWW advertising, Web design, and business information.
European Buyers and Suppliers
Search by product type or by company name.
Export-Import Bank of the United States
This bank is heavily involved in the financing of many export and import businesses. Their Website offers information about countries as well as educational seminars and products that they offer.
Article written by Elizabeth H. Cottrell, staff writer and editor for the IAHBE. Elizabeth is a home-based entrepreneur, freelance technical writer and owner of Riverwood Technologies, a desktop publishing company in Maurertown, Virginia.