Going Global : U.S. Government Helps Local Businesses Build Export Links
For two years, Affordable Building Systems, a small Sun Valley manufacturer of prefabricated housing, sold its products mostly inside the United States.
Then, in 1993, Marketing Director Rich Govea decided to test the uncertain waters of international trade. He placed an advertisement in an international publication called the Export Yellow Pages, published by the U.S. Department of Commerce. The price of the ad: $275.
Within days, somebody phoned from the Mexican armed forces. How fast and how cheaply could ABS construct 157 prefabricated units for use as barracks by the Mexican military?
A bid was quickly prepared, and within a week, a $9-million contract signed. Almost overnight, ABS--whose sales had dropped from $3 million to $200,000 annually after the company separated from a larger firm--had its largest contract ever and launched itself as a bona fide international exporter. More recently, the company has been contacted by Japanese developers seeking low-cost, easy-to-assemble housing for areas devastated by the Kobe earthquake.
How did the company do it?
With help from an often overlooked resource: the U.S. and Foreign Commercial Service, a branch of the U.S. Department of Commerce. Increasingly, small to medium-sized companies like ABS are turning to this agency and other government trade resources to boost sales and stay competitive in rapidly expanding global markets.
Representatives of about 100 businesses gathered last week at an export conference to learn about such opportunities and glean information from trade experts and government export specialists, including the U.S. and Foreign Commercial Service, the Export-Import Bank of the United States and the California Export Finance Office.
Those in the audience spanned the spectrum of industries, from aerospace to software, publishing, light manufacturing, computers, food and beverages. Many said they currently do some business overseas but could use help developing their overseas marketing base and distribution networks.
That’s where government trade and export agencies come in.
“Our agencies are so small, and we’re spread pretty thin, but we’re the best-kept secrets in trade and finance,” said Jill S. Frieze, marketing officer with the Export-Import Bank of the United States.
Frieze’s agency specializes in providing loans and insurance to U.S.-based exporters and has special programs for small companies, especially those in environmental technology or services.
Other government agencies, such as the U.S. and Foreign Commercial Service, offer customized sales surveys, trade data reports and foreign market research and can help link California businesses to potential overseas buyers or distributors.
“Our most popular services are the Export Yellow Pages and the Commercial News USA,” said David B. Ponsar, international trade specialist with the service’s regional office. “For $495, information on small businesses will be distributed through the Commercial News to more than 150,000 agents, distributors, buyers and others around the world,” Ponsar said. Trade specialists from his office follow up with their clients to ensure that they have the proper marketing data, resources and other information to continue selling overseas, Ponsar said.
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Michael W. Liikala, western regional director for the U.S. and Foreign Commercial Service, identified 10 “big emerging markets” that he said exporters should target: Argentina, Brazil, China, India, Indonesia, South Korea, Mexico, Poland, South Africa and Turkey.
“By the year 2000,” Liikala said, “imports to these countries will exceed imports to Europe and Japan. U.S. exports to these markets alone are projected to reach $1 trillion by the year 2010.”
One quick and easy way to start marketing products abroad is to advertise with on-line services or on the Internet, said GTE’s Erik Phelps. For a nominal monthly charge, small businesses can set up a “home page” on the World Wide Web section of the network that can be accessed by millions of on-line merchants around the world, Phelps said.
Roosevelt Roby, CEO of World Business Exchange Network in Santa Monica, already advertises on the Net. But he gets a lot of business from ads placed in international trade publications that provide his fax-on-demand number. By dialing up his fax, merchants automatically receive information about his distributing and consulting company and the goods and services he can provide.
“You get the sale without having to go through all this training, red tape and all this other stuff,” Roby said. “I’m sitting at home in Santa Monica. I never left home, and the business is coming in through my fax and my computer. Any Mom-and-Pop business could do this.”
After the conference, Ismael Charnabroda, who started IC Engineering in Encino after Rocketdyne laid him off three years ago, said the computer information was the most useful to him.
“I need to expand my marketing around the world, and I need help,” said Charnabroda, who invented an instrument called the digi-field, a field-strength meter that measures the radiation patterns of antennas and other electronic devices.
“The Department of Commerce, I see, can be helpful,” Charnabroda said. “They can investigate the companies that I might want to do business with. I’ll ask them: ‘What can you find out for me, how can I get the names and contacts of people who might want to buy my instrument around the world?’ ”
It’s important for American companies to start asking those kinds of questions, said U.S. Rep. Howard L. Berman (D-Panorama City), who co-sponsored the conference along with the Pacoima Chamber of Commerce and the Valley Industry and Commerce Assn.
“Small companies often lack knowledge and resources to be successful exporters,” Berman said. “If the United States wants to maintain its position as the world’s leader in international trade and continue to create high-quality jobs, small business will have to become even more focused on exporting their products.”
