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Good Government: Resources for Export Growth

Oct. 18, 2017
Where small and midsize manufacturers can find federal, state and local resources to launch and grow their exports.

Exporting can be a complex process. Whether it’s navigating international regulations or understanding market risks and opportunities, the exporting process may seem daunting for small and midsize manufacturers.

“The biggest challenge companies face is lack of familiarity with conducting international business,” says Ed Marsh, exporting adviser to American Express Grow Global. “There are regulations, terminology and considerations that company leaders haven't had to deal with in the past.”

Many manufacturers struggle because they don’t understand that government resources are available to help them enter foreign markets, says John Scannapieco, a shareholder in the Nashville office of Baker Donelson and co-leader of the firm’s global business team. For example, the U.S. Commercial Service provides export assistance at more than 100 offices nationwide and in more than 70 international offices, Scannapieco says. 

The U.S. Commercial Service, which is the trade promotion arm of the Commerce Department’s International Trade Administration, offers various services including an initial market check, profiles of potential trade partners and customized market research.

“That’s first place I suggest any company go, especially if they’re small,” Scannapieco says. “They have professionals who can help you determine whether you’re export-ready, and if you are, what are the next steps.”

The U.S. Commercial Service’s initial market check provides businesses with the preliminary information they need to evaluate market potential, according to the department’s website. The market check also includes a preliminary snapshot of the market potential for a product or service, feedback from local contacts, the amount of market interest in a product or service and recommendations for next steps. The service costs $450 for small and midsize companies and $1,280 for large companies, according to the U.S. Commercial Service. 

The department also offers resources that aren’t directly export focused, such as ways to improve processes or prepare the workforce to satisfy export orders, Scannapieco says.

In addition, U.S. Commercial Service Gold Key and Single Company Promotion programs help U.S. manufacturers meet qualified foreign buyers, which saves them from traditional prospecting, Marsh says.

Other Government Resources

Other national agencies that provide specialized services include the U.S. Small Business Administration (SBA), the Export-Import Bank of the United States, the Overseas Private Investment Corporation and Trade Adjustment Assistance for Firms, Marsh says.

The SBA, for example, offers express loan programs that help manufacturers obtain larger working-capital loans, Scannapieco says. They’ll also help these small companies get working capital or help finance the transaction, he says. Some of these resources can help manufacturers manage compliance issues, as well, Scannapieco says. For example, some manufacturers might have a dual-use item that has military component to it. Also, U.S. companies can be subject to legal risk for corrupt actions taken by third parties on their behalf - even without their knowledge, Marsh says.

Resources also are available at the state and local levels, as well. State programs often focus on industry clusters, grants and trade missions, Marsh says.

“The most successful exporters companies tend to have strong relationships with local agencies and experts,” Marsh explains. “The baseline partnerships with state and local resources are advisory. Local resources are particularly familiar with the experiences of other local companies, which tend to be in industry clusters. For example, resources may be familiar with common challenges and opportunities in health care, industrial manufacturing, agriculture or electronics.”

State and local agencies also are good sources for specific transactional expertise such as international legal, logistics and accounting, Marsh says. In addition to government agencies, manufacturers should seek other local exporters and experts as a resource, according to Marsh. “It’s important for businesses looking to export to meet and network with other businesses that have traveled this journey - successfully or not,” he says.

Why Export Help Matters

These agencies can help manufacturers avoid risks and maximize their opportunities in new markets through information.

“When exploring new markets, make the decision based on demonstrated opportunity – for example, through online inquiries, sales and data or comparable company success -- not on market size or population,” Marsh says.  “Some high-population markets that receive a lot of attention are actually very tough markets to start. Companies often fail in these countries, which can lead to the conclusion that exporting isn't for them, when, really, they might have had splendid success in another smaller country that could have been more interested in their product.”

Manufacturers also should research and select partners carefully to avoid ending up with long-term, exclusive contractual obligations inadvertently, Marsh says.

“Remember to be patient,” Marsh advises. “Not every order will come quickly, so concentrate on incremental progress and recognize that many markets build business on top of long-standing relationships. Exporting is often less transactional than American businesses and sales cycles can be substantially longer.”

3 Keys to Successful Exporting

 Manufacturers should focus on three key factors as they enter the export market, says Ed Marsh, exporting adviser to American Express Grow Global. They include:

1.Develop a Digital Marketing Strategy

“Businesses should focus on creating really effective and superb digital marketing assets. The same work to develop online prospects that is important for doing business in the domestic market will often gradually yield international inquiries, orders and then data to guide and focus further incremental localization and expansion efforts. This is typically understated in conversations about translation tools and other technical details. It is a fundamental change in the export landscape for small- and medium-sized businesses. From individuals selling crafted items from their living room online, through upper middle-market companies developing new indirect sales relationships in fallow markets, the Internet is an enormous driver of export revenue and intelligence. Recent research from Deloitte and Google finds that small and mid-sized businesses with advanced digital marketing were three times as likely to have exported.”

2.Take Advantage of Government Resources

“The second key is the combined value of the U.S Foreign Commercial Service and the local U.S. Export Assistance Center. Between the two, companies have a local export expert available on call in a city nearby (108 around the US) and a business development team on the ground in multiple locations in more than 75 countries. At a low cost, they will work for companies as an additional arm of their business. It's such an incredible value that many companies don't understand the benefits of until they've used it.”

3. Attend Trade Shows

“As they accumulate data through digital efforts and identify market opportunities, trade shows are a relatively inexpensive way -- many states subsidize participation and there are sometimes U.S. pavilions --  to meet many international buyers and indirect channel prospects in a very short period of time. There's a lot of market savvy and cultural insight that can be acquired in a few intense days.”

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