Exporting Doesn’t Need to Be So Foreign

Although political conditions in the Soviet Union, Eastern Europe and several other hot spots are tumultuous right now, there are true opportunities abroad for small-business owners willing to be patient and persistent.

It may take a while to put a deal together, but exporting is an attractive way to boost sales during sluggish economic times at home. Although opportunities abound, fear of the unknown is the major reason most small-business owners shy away from exporting goods or services.

“The reason 70% of smaller companies don’t export is because they perceive there is no single accessible source for export information,” said John Rennie, author of “Exportise: An International Trade Source Book for Smaller Company Executives.”

Rennie, a veteran exporter who is also chairman and chief executive of Pacer Systems Inc., a Massachusetts aerospace firm, said there is a wealth of information and support for small-business owners who are willing to invest the time.

There are scores of trade missions sponsored by individual states and the federal government that welcome small-business participation. Last year, the U.S. Small Business Administration sponsored 100 small businesses on “matchmaker” trade missions jointly sponsored by the Department of Commerce.

The SBA and the U.S. Export-Import Bank (known as the Eximbank) both offer government-guaranteed export financing. Most states, including California through its State World Trade Commission, also offer financing assistance.

“We have no choice but to jump in and get moving,” said Irene Fisher, director of the commission’s Export Finance Office in Los Angeles. “U.S. products are so welcome overseas.”

Tim Murphy, vice president of trade services marketing for Security Pacific Bank in Los Angeles, said many business owners are reluctant to sell overseas.

Murphy, also president of the Export Managers Assn. of California, said it is important to match the method of financing with the preferred means of doing business in that country. Trade specialists working for the Commerce Department’s International Trade Administration can become a small-business owner’s best friends. The specialists, based in offices around the country, work with their counterparts in American embassies and consulates around the world.

For very nominal fees, the ITA will distribute your company’s catalogues or videotapes to customers in distant countries, provide mailing lists or evaluate the financial stability of a foreign company, among other services.

They don’t just sit around the office, either. For example, John Steuber Jr., ITA district director for Des Moines, Iowa, is enroute to Stavropol, a state in the Soviet Union, where he will be posted from January to April. Steuber’s mission: to match up Iowa companies interested in doing business in that Soviet state.

Right now, Iowa-based firms are selling everything from key chains and mousetraps to heavy farm machinery all over the world.

In Long Beach, a new International Business Incubator recently opened in the Greater Los Angeles World Trade Center. The incubator combines traditional executive suite services with the expertise of nearly two dozen import-export consultants.

Once a company representative settles into its high-tech office space, the incubator’s consulting team is available to help secure export financing, develop international marketing support or arrange ocean and air freight transportation. The consultants charge $100 an hour or incubator tenants can pay about $1,250 a month for 16 hours of consulting services.

“Our objective is to help a domestic company go international and help foreign companies come into the U.S.,” said Thomas Teofilo, president of the World Trade Services Group in Long Beach and coordinator of the incubator program.

Kevin Mills, regional manager for Young Environmental Systems Inc. of Vancouver, B.C., recently moved into the incubator to open his firm’s West Coast office. Mills is seeking to expand the U.S. market for his company’s computerized environmental logger, which measures temperature, humidity, air pressure with a hand-held unit.

“I don’t think I could feel any more welcome,” said Mills, who is meeting with incubator consultants to decide which ones can help his company prosper.

In addition to export consultants of all shapes and sizes, some companies skilled in international trade are willing to help small-business owners by investing in the deals in exchange for an equity position.

“Because we are an integral part of our client companies, we sustain the relationship over time and provide them with the depth of advice and support they need to succeed in the changing international marketplace,” said Harvey Morris, president and chief executive of the ‘76-’92 Group of Sea Bright, N.J.

Morris said the firm, which was founded in London in 1979, has worked with companies exporting equipment and chemicals and is now moving into software.

Once you’ve located a market for your products, don’t be afraid to do business in a foreign currency.

“You may lose opportunities if you are not willing to consider dealing with foreign currencies,” said Donald Byram, an export financing consultant in Sherman Oaks.

Although some foreign currencies are volatile, there are advantages, including elimination of conversion costs and making it more attractive for foreign buyers to deal with you.

“Exportise, An International Trade Source Book for Smaller Company Executives,” is published by the Small Business Foundation of America in Boston. The book explains everything you need to know about exporting.

You can order the $49.50 book by calling the foundation’s Export Opportunity Hotline at (800) 243-7232. Hot-line staffers can also answer questions and provide trade information.

To learn more about the matchmaker trade missions, contact your nearest U.S. Department of Commerce District Office or the SBA office nearest to you.

SBA Office of International Trade: (202) 653-7794.

Export-Import Bank: Small Business Assistance automated hotline, (800) 424-5201; Export Trading Company Assistance, (202) 566-8944.

Southern California business owners interested in export opportunities can contact the Export Managers Assn. of California at (213) 749-8698. “Who’s Who in Foreign Trade,” a directory published by the Foreign Trade Assn. of Southern California, is available for $23. The association is located at 900 Wilshire Blvd., Suite 1434, Los Angeles, 90017; phone number is (213) 627-0634.

California State World Trade Commission headquarters are at 1121 L St., Suite 310, Sacramento, 95814; (916) 324-5511.

The Los Angeles export finance office has a package of information available. The address is 107 S. Broadway, Suite 8039, Los Angeles, 90012; (213) 620-2433.

The state’s Office of Export Development, One World Trade Center, Suite 990, Long Beach, 90831; (213) 590-5965.

TIPS FOR EXPORTERS Review your products or services to see if they have export potential.

Learn as much as you can about the foreign markets you want to pursue.

Study local customs and business practices carefully to avoid insulting prospective customers.

Tap into the wealth of state and federal programs available for small-business owners interested in exporting.

Be patient and persistent. Long-term relationships pay off for business owners who are willing to wait for results.

Be willing to invest your own time in meetings and travel. Many foreign customers prefer to deal with the person at the top.

Set up the right kind of financing and payment plan and look into buying commercial and political risk insurance to protect yourself.

Take advantage of all the workshops and seminars available to teach export skills.