Monday, December 19, 2011

Exporting- Essential Market Research

Exporting, like everything in business, requires extensive research.  Selling your product/service in the international market can be a daunting task; it’s hard enough to get your product/service to be recognized at home, let alone in a foreign country with a different language and culture. As a business owner it is important to be organized, in order to be successful in exporting you need to be even more organized, and it starts at the market research phase.
Exporting requires capital, sometimes extensive capital, so before you go and spend your capital on a failing venture you need to know several things. Some of the questions you can ask yourself are:
1. Is there a market for my product/service in the region?
2. Do i target an area or a specific country?
3. What is my competition, both at home and the export destination?
4. Any government regulations concerning my potential exports?
The list of questions to be answered can be extensive, but it is important to spend the time and effort to do this. You are the small business owner and exporting could either create opportunities or put you out of business. I suggest a "business rhythm", this derived from my days in the Army doing "Battle Rhythms", for your research. The caveat is this is not a routine! It’s a framework, you a lot time to complete the research tasks that you need to get completed, on a weekly or monthly basis, and try to stick with those. If you can’t its fine, but you shouldn’t be exporting if you can’t put the time to do research. Some of the tasks that i do for my market research business rhythm include:
1. Read local news about the region/country that interests me
2. Go to export.gov and read market analysis for the region/country
3. Research the commerce department of the export destination
4. Research conferences or trade shows focused either on my product or on the region i want to export too.
These are just a few, just as the questions, the tasks associated with your business rhythm should be tailored to the amount of time you are willing to spend and you specific business needs.
 Conducting research is not glamorous, even an enjoyable part of being a business owner. In exporting though, it is essential to do so, and do it extensively. Market research will lay the foundation for a successful exporting venture.

Friday, December 2, 2011

Exporting CONOPS: a Business Operations Plan


By Juan A. Salva

                Exporting is usually touted as a possible solution to various economic problems in the United States. Small Businesses, actually business of all sizes, are encouraged by a plethora of government agencies to increase their exports. The US Commercial Services, the Export Import Bank and the SBA are just a few of those agencies. Yet, according to Jason Katzman in his "Basic Guide to Exporting", many businesses are simply not prepared to export, basically having no plan and stumbling unto exporting opportunities having to figure out how the business should operate.  With Ex-Secretary of Commerce Carlos M. Gutierrez stating that close to 70% of the purchasing power in the world resides outside the United States it is surprising that business are not better prepared for this.

                Proposed in this blog entry is a simple solution, small businesses should focus in developing different concepts of operations, or CONOPS, to lay the foundation for exporting. This is simple yet different from a business plan. In a CONOP the business would lay the foundation of how the business will operate if encountering an export opportunity in different regions of the world. A basic layout of a CONOP would include the following:

1. Which business services could potentially be developed in the region?
2. What permit, licensees or fees are involved with exporting to the region?
3. Applicable U.S. laws, regulations or restrictions
4. How will the business be structured if exporting occurs?
5. How will the business be staffed? recruiting strategy? overseas locations?
6. Possible courses of actions regarding the expansion of the exporting venture

                These are just a few of the questions that should be asked, and included in the CONOP, for exporting. The advantage of CONOPS is that businesses can take time to develop them. Exporting opportunities might not occur immediately, but with a basic plan in place, the business can at least not be completely surprised when the opportunity occurs. Secondly, the company can develop different CONOPS for different regions, so CONOPS do not need to be imbedded in the business plan, but could be shorter annexes to it that a business manager could refer to if the opportunity arises.

                CONOPS for exporting are a possible tool that business could exploit. The only caveat is that these, as the business plan should be, are living documents so they should continually revised and updated. What are your thoughts on developing these kind of documents?

Wednesday, October 26, 2011

Small Business Micro Funding. Where is the site?

Funding seems to be an issue for many small business owners. Whenever funding is mentioned it immediately conjures pictures of us presenting our business plan in front of a board of investors, the fate of our business in the balance. However the concept of micro seems to be lost in the literature out there. I just read a good blog by Michael Bowers regarding the importance of doing proper market research and having a solid business plan before attempting to ask investors for funds (http://networkedblogs.com/p0HLT). I completely agree, however when I think of this I think of REAL funds, as a loan with investors requiring a stake and usually some control over company operations, but what about a small amount? A micro amount? Let me give you an example.

Say you are starting your business, you are just doing the basic steps, just got your website going and you are looking to start a marketing campaign. You look at Facebook and its "pages" for businesses. Since you have 10,000 friends on Facebook you figure placing an advertisement here is a good way to start (needless to say I don’t have that many friends in Facebook but I am sure some of you do). Now you don’t need $1 million from investors to get your marketing campaign going, your business is not there just yet. You don’t even need a $20,000 loan from a bank to get going. All you need is $200 to test your 2 month marketing campaign on Facebook ads. Where do you go?

Now artists can go to Kickstarter (http://www.kickstarter.com/) and there they can get people to fund their projects. If you are a nonprofit, or a small business owner, in the third world you can go to Kiva (http://www.kiva.org/) and you can get generous souls to fund your operations. But what if you are a small business owner in Miami? A regular business owner, trying to make your business grow. Where do you turn? Surprisingly I have not found any places where you can go. Now I might be wrong and maybe missed it but I spend most of my day doing research, so if there is an organization out there doing this I honestly don’t know. But if there are sites for artists to get donations to do movies and paintings, if entrepreneurs in the third world have a venue, why can’t small business owners here have one? I am not talking about massive funding; let’s fund an Ad campaign for $100 or lend $200 to a small business owner to help him with those brochures.

The key here is the SCOPE of the funding. There are sites out there, like Angelsoft (www.angelsoft.net), who can provide an outlet for large investments. What we need is an outlet where, let say, I want to help a local business in the area with $200 dollars for whatever purpose they wish to use it. I should be able to go to a website and find a business to "donate" my money too.

I know that in these times lending, or giving, money to business does not seem like a popular or wise idea. However remember that these are SMALL businesses. It might be your unemployed neighbor, who just needs a little bit of extra cash to get the word about his business out. Or it might be your local ‘mom and pop’ store who wants to reach new clientele but times are tough and it needs a little bit of extra cash to put together an outreach campaign. Being Micro, we are not helping big business; we are encouraging the "little guys" to get their businesses going.

Where is the Micro lending site for Small Business Owners? If you have found it let me know.

Look forward to your comments,

Saturday, October 22, 2011

U.S. Commercial Services: are they reaching us?

By: Juan A. Salva, Owner Il Esportatore, LLC
The federal government continues to promote exporting, and its expansion, as an alternative for the U.S economy to expand. The president of the United States has even pushed several trade agreements to the congressional floor in order to facilitate trade in hopes of possible job creation (http://www.kansascity.com/2011/09/09/3130427/politics-on-trade-trumps-common.html).  It is the contention of this article that although there seems to be an ever increasing call for a more active U.S. exporting presence the services provided by the federal government, while slowly improving, seem to be disjointed and not easily accessible to the majority of small and medium sized businesses, which can potentially be hindering the ability of these potential exporters to heed the president’s call. In this article we will analyze two services provided by the government the Small Business Administration platform and the U.S Commercial Services platform.
U.S Commercial Services Platform
By its own mission statement the U.S Commercial Services is the trade promotion arm of the U.S Department of Commerce with a specific goal of helping companies getting started in exporting (http://trade.gov/cs/). The Service provides a variety of programs and a wealth of information. But how is the service reaching its audience? It has a Facebook, Twitter and blog but is this enough? There are a variety of issues concerning this outreach which could improve performance.
                First, the information provided is static. The web page contains a wealth of information but if the users are not familiar with what the service does, it is hard to find it on a search. Additionally the Facebook and Twitter pages are again static. The main role seems to be to communicate press releases as seen in the current Facebook (http://www.facebook.com/TradeGov) and Twitter (http://twitter.com/#!/TradeGov) pages. There is no exchange of information, no input from the users, just press releases in a digital format. Evidenced by the number of “likes” and “followers” the results are less than impressive.  This service could benefit from an exchange of information with business owners rather than a supply of static information to business owners.
                Second, the information provided is also confusing.  The use of industry specific terms and academic jargon is evident thru every page. How are we communicating with the hard working small business owners who want information presented in a plain and simple way? BLUF- Bottom Line Up Front. A small business owner who wants to export to “X” country needs to know information that is readily accessible and useful to him, reading the 17 page white paper “Developing Countries’ Regional Trade Agreements: Overview and relation to U.S. Trade” (http://www.trade.gov/mas/ian/otpahome/index.asp) rarely qualifies as a BLUF assessment of what the business needs to do to get exporting and the businessman/woman does not have the time to discern actions from that document.
                Lastly, and sadly, how are we communicating with business owners from other ethnic backgrounds? The Service seems to assume that every business owner is not only college educated but completely fluent in English. How are we reaching those owners with limited English capabilities, which are definitely a presence in U.S. businesses? The Chinese, Korean, Spanish, Portuguese, etc. speakers who do not have the time to learn college level English in order to read the information from the Service? This is a huge gap in communication which the Services do not seem to address at all.
                This is article is not intended to accuse the U.S. Commercial Service of not doing enough; it has a variety of programs that are beneficial to business owners. The US Commercial Service is also actively attempting to reach out to businesses. This article is based on suggestions, the service is implementing new ideas and fine tuning this implementation, by adopting some of the ideas presented in this article could be beneficial to the service.
What do you think?
I look forward to your replies and an exchange of ideas.