Guides to Nowhere? The ITA’s good guides with no plan.

I just finished reading the International Trade Administration’s Trade Finance Guide (you can find it at http://export.gov/static/TradeFinanceGuide_All_Latest_eg_main_043219.pdf ). There is plenty of useful advice on it on things such as Export Credit Insurance, Factoring and a brief summary on Letters of Credit.  The guide is useful and its language is plain and easy to understand.  I tend to read most of the products that come from the ITA, such as A Basic Guide to Exporting, but after reading this one a concern seems to continue to come up. The ITA seems to be publishing good products but without any clear cohesive strategy, the SME owner basically has a guide that explains the basics of exporting and then another guide that gives information about financing. There is no “cradle to grave” guide that tells you HOW to export! 

The most fundamental and basic step, finding clients for your products overseas, seems to be overseen at best or assumed at worst.  A guide that explains the business process could be more beneficial. Clearly defining steps such as assessing your products/services, finding clients overseas, negotiating with clients overseas (to include method of payment and negotiations), financing, shipment of products/delivery of services and receipt of payments would be good a start. Obviously the business process is far more complicated but a coherent guide that takes the SME owner from the “cradle” of exporting (i.e. product or service self assessment) to the “grave” (i.e. goods shipped/service provided and payment received) is far more beneficial than good guides published at what seems to be random times. I know that services such as Gold Key Matching exist to find overseas buyers but not all SMEs prefer to pay the associated premiums of such services.

As always I look forward to your thoughts.

Florida: Exporting and SMEs

Recently I came across a report from International Trade Administration (www.trade.gov/mas/ian )regarding Florida Exports, Jobs and Foreign Investment from June 2012. The report had some interesting facts that I thought i will share. Florida is were i operate my business so i also have some selfish reasons to share this with you:

1. 37,687 companies exported from Florida in 20009 of those 36,109 were Small and Medium Sized enterprises (SME)

2. 67% of Florida's total exports are from SMEs

3. The largest trading partners are Switzerland ($7.3 billion in export sales), Brazil ($5.3 billion), Venezuela ($4.5 billion), Canada ($4.1 billion) and Colombia ($2.8 billion)

These figures seem impressive, however, when I see these figures i think of the challenges and opportunities of exporting. Consider these other figures from the Census Bureau (www.census.gov):

1. Florida has 491,249 private non farm establishments

2. Total number of firms in Florida is 2,009,589 for 2009

Do you see it? According to these figures only 7% of businesses in Florida engaged in exporting! I know some of you might point out that private non farm establishments are not the same as companies but even accounting for different types of establishments there is still a vast number of Florida companies that do not export. The opportunity to expand our exports is enormous! Do you see the second opportunity? Most of our exports are going to South America, a few to Europe. What about Africa, Central America, Asia? There are numerous places were Florida businesses can expand and export. I see these challenges as opportunities and as we all well know running a business is about seizing opportunities.

Is your next business breakthrough in Sub Saharan Africa?

I read a press release from the International Trade Administration this morning. Its an old one, dated June 14th, 2012 but the information is still relevant. In thepress release the World Bank's "Doing Business in a more transparent World" document is cited as evidence that 36 out of the 46 economies in Sub-Saharan Africa have improved business regulations this year and 6 of the world's 10 fastest economies are in this area as well. Hopefully this translates to better export opportunities for our businesses. The point here is simple. This COULD be the next big market for your business.

I know many of you are thinking do not put too much thought into this area. Asia occupies most of the commercial "bandwidth" out there and Latin America follows as our business are far more adept at conducting business in those countries than in sub-Saharan Africa. For this same very reason this is why it could be a potential market, the competition might be less fierce and the opportunities might be more abundant. Obviously this is just food for thought, a proper market research needs to be conducted before ANY business decides to take this leap but the facts are there, this area is growing, its growing fast and many are not paying attention.

You can read the press release at the following link:

http://blog.trade.gov/2012/06/14/growth-and-opportunities-in-sub-saharan-africa/

I look forward to your comments.

Those busy bastards...

Those "busy bastards"...

I was recently reading Colin Powell's new book "It Worked for Me: In Life and Leadership" and the General had an interesting concept that I have never heard of before, he called it the "busy bastards". Now I don't remember how General Powell came about with that term, I do remember that he heard it from one of his colleagues in the Army during his long and distinguished career. Nevertheless it is an interesting concept. The General was referring to those individuals who sometimes have exceptional skills but confuse being "busy" with being productive. Having spent a short time in the Army myself, I stopped and thought about this for a while, in such a short time a met plenty of "busy bastards" too! Don't get me wrong, many of the guys I served with are exceptional leaders, Soldiers and human beings but many of them truly believed that the way to show the "boss" that we were being productive was by being busy.  I started thinking about this concept as it applies to business ownership and entrepreneurship and I thought "Many of the small business owners I know are busy bastards too!"

Let's think about this for a minute. Usually small business owners are pressed for time. We have to figure out how to market our products, plan and supervise our operations,  manage our resources effectively, maintain our financial accounts, pay our employees, etc, etc.  More often than not we don't have a Human Resources department or a Finance department that can do this for us, we have to do it on our own. However a business owner doing all of these tasks doesn't necessarily mean that he must be "busy". We need to strive to move beyond being busy. Is the way I am operating the most effective way? Is my marketing really working? Am I doing payroll the most efficient way? Being a "busy bastard" prevents us from THINKING about our business and how to improve. If a business owner stops thinking and innovating they are bound to fail.

In the export/import business it is REALLY easy to fall on the "busy bastard" rut. Try completing a SED or using AES for a minute without being frustrated.  Do not let the tasks become "busy work". Take the time to think about your business and how to improve, constantly. We must always be productive but never "busy". That is a good lesson that I have learned from this book, which by the way I recommend, it is an amazing read.

Look forward to your comments.

Export Broker: Building your Network of Trust

 Exporting can be complicated.  Fortunately if you are like me you picked the least complicated position in the export/import industry, being an export agent/broker. Our friends doing distribution or manufacturing require much more time and capital to get their businesses of the ground. We focus on the deal, as long as you have a penchant for getting two parties together and completing a deal you have a good foundation for being an export agent.  Most experts on the subject start with the same basic advice, find a good product and try to find a buyer for the product abroad, all for a commission. Although this is sound advice it is not as easy to find a "good" product to export, or for that matter a manufacturer that is willing to let you try to sell their product abroad. 

I do not suggest that you should deviate from this advice, finding a good product to export IS the best way to complete a deal but this other advice might be helpful as well.

1. Plan for your venture to take time. Exporting is all about building relationships. It is difficult to find a manufacturer that will trust you with a product because they want someone they can "trust".  Exporting is a difficult business with many pitfalls, building and maintaining that trust is essential and it takes time.

2. Plan to take even more time building your network.  Your network is the basis of your "sourcing". In a business where trust is key your network is the way to get your trust noticed. In exporting, word of mouth still counts. Spending the time to get to know others in the industry and try to carve your own niche will yield results.

So there it is, being an exporting agent is more than just having the right product. It requires building the trust and creating a network to support your business.

As always your comments are always welcomed,

Export Broker: Adventures in the Trade " The Export Assistance Centers"

If you are like many of us on the export/import arena you probably read, or at the very least browsed,  "A Basic guide to exporting". This "document" has been produced an important resource for distributing the basics of exporting to the widest possible audience for more than 70 years. Reading the 2012 version, which was advertised as completely revised and updated in the export.gov website, I have arrived at 2 conclusions that might help others in the export/import broker business.

1. The revised and updated edition is neither much revised nor much updated. If you have a copy of the old guide I suggested that you should hold on to that and wait for another "revision". Many of the examples are from the pre recession era (i.e. 2005 and 2006). This might have been good enough a decade ago but we all know that the market is changing at light speed this days, a guide with information that is 6 years old is not keeping much up to date. The problem is not that the information is obsolete, the issue is that much of the information loses its relevance. Save yourself the time, keep using your old guide.

2. Don't be discouraged by the Export Assistance Centers. In the guide all of the answers seem to rest at the Export Assistance Centers. With such a phenomenal organization, how are independent consultants going to survive? Surely the EACs will run all of us out of business. Not true. First let us remember that the EAC are just plain government agencies, i.e. not known for being efficient or providing the best service. Granted that there are excellent trade specialists in many of the EAC but overall the service is not much different than other government agencies. Second, the EAC can provide a lot of the information, but they can't represent a sole party. Your attention is divided among many customers and your best interest, although important, are not the sole interest of the center.  Independent consultants fill many voids that the EAC, simply by being government agencies, can never fill. Learn to leverage their expertise and work with them, but constantly remind your clients that there is a difference, in quality and service, between a government agency and a private company.

As always I am open to your comments on the opinions presented in the blog.

I look forward to your comments.

Export Broker: Adventures in the Trade " The Sales Department"

Brokering deals, what I specialize in my business, can sometimes be dull as well as exciting.  Regardless of the day to day events I always learn something new. A couple of weeks ago I had a Central American client who was interested in a product, the client had specifically stated that she wanted the product to be manufactured in the United States. Now, I am an advocate for U.S. companies exporting their products but I honestly had nothing to do with this request, for whatever the reason this client wanted her products to bear the "Made in the U.S.A" stamp.  I go about doing my normal research,  after a couple of days I narrowed it down to a couple of companies that had the product.  After narrowing the list I started to make phone calls. This is where I made my mistake, and I relate it to you so you avoid it. Once I started calling I usually contacted the Sales Departments... wrong answer. These Sales departments are ruthless, and obscuring the truth seems not to be an issue. However many of them, specially with other small companies, are just way out of their league when it comes to exporting.  They usually don't have the knowledge or the decision making authority to obligate the company to an export deal. I wasted about a week doing this with little feedback, almost no information to give my client and as far away from the deal as I started.  I changed tactics and started researching  the leadership of these small companies, you will be surprised how much info you can find online.  I started contacting V.Ps and Owners and the answers and I got were way more helpful.  Some of the manufacturers that I contacted, companies known for their U.S. products, were even made in the U.S. at all.  I received an answer stating that " our products are Chinese made but we distribute in the U.S" now talk about useful information! I am still working on the deal, but now we are finalizing details of a trade rather than on the initial market research stage. Here are some tips for your own search:

1. If contacting a large supplier, contact the sales department first. However, double check absolutely everything that the department tells you. Ask about their exporting history and for point of contact  information of officers if the company exporting history is flimsy.

2. If contacting a small business or supplier, contact the officers directly.  Ask about the exporting history and on what terms they would be willing to conduct an export if no previous history.

3. Double check the answers you receive! There is nothing worse than presenting false information to your client. 

4. Be prepared to answer numerous questions, make sure you understand the requirements of your client, the regulations that will govern the trade, the terms of your client,  request of samples if necessary, etc. You are the expert for both your client and the supplier.

5. Stay positive, sometimes the deals fall through, The details might not be favorable or the client loses interests, there are a million reasons for the deal to go bad. Don't dwell on it, learn from the experience and move on to your next deal.

As always, look forward to your comments.

U.S-Korea Trade Agreement. Whats in it for you?

Last fall news of Free Trade Agreements appeared in the media for a brief period. The U.S. had finally signed three different FTAs; one being with South Korea. The news quickly faded more "pressing" matters like politics or the newest movie in Hollywood. But if you are a business owner, what does these news mean for you?

This morning I was reading my daily newsletters when I came across a brief article from the International trade Administration on the U.S. - Korea Free Trade Agreement. If you are a business planning on dealing these following points might be of interest to you:

1. The agreement comes into effect on March 15, 2012 (yes, in about a week!)
2.Almost 80% of exports from the U.S to Korea can be imported duty free, this is good news for both companies doing business there and those planning to do business there. You can use the FTA tariff tool, http://export.gov/FTA/ftatarifftool/index.asp , to see if your product qualifies.
3. Nearly 2/3 of all U.S. Agricultural exports to South Korea become duty free starting on March 15.
4. Commitments concerning intellectual property rights and the opening of Korea's enormous service market will also come into effect on March 15, 2012.

As most government regulations, if you do not claim the benefits of this agreement on your import/export activities you will simply not get them, you must explicitly claim them in order to take advantage.

FTAs are a great incentive for exporting, knowing the details and how they can benefit your operations is key. If you want to read more about this particular FTA go to http://blog.trade.gov/2012/03/06/how-u-s-companies-can-start-taking-advantage-of-the-u-s-korea-trade-agreement/

Look forward to your comments