How the Euro Crisis Could Be Good For You
Doing business in Europe right now is a scary thought: The euro has pretty much crashed through the floor, the Greek government is pleading for a second bailout, and European stock markets have tanked.
So it's no surprise that plenty of American companies are feeling the shockwaves of a turbulent economy overseas. Fourth quarter earnings reports confirm this. One company, Schnitzer Steel Industries, a steel manufacturer, announced on Monday that it expects its fourth quarter results will be lower than expected "due to weaker than anticipated global market conditions." It's a phrase we'll probably start hearing often.
But not all American firms are hurting. Some entrepreneurs say the Euro crisis has been downright good for business.
European Companies Are Looking For Cheaper Options
Kenneth Wisnefski is the founder and CEO of WebiMax, an online marketing firm based in Mount Laurel, New Jersey, that specializes in search engine marketing. He's a three-time entrepreneur and founded WebiMax in 2008, in the midst of the recession. In 2011, they made $8 million in revenue, and have grown to 150 employees. WebiMax's clients run the gamut from Fortune 100 companies to American small businesses, and also include 100 to 150 European companies.
Wisnefski says since the European financial crisis has begun, the company has seen a noticeable increase in European leads—mostly from firms seeking cheaper advertising avenues. "Our leads have increased about 10 percent from European clients," he says. "The number one reason is given the tightening financial market, a lot of European firms are looking to leverage social media and local SEO to compete since they no longer have the lavish budgets to use television, newspaper...and traditional marketing."
Wisnefski also notes that traffic to WebiMax.com from .EU domains and IP addresses in Europe has led to a 10 to 20 percent increase in overall site traffic in the last few months.
It's More Economical To Do Business in Europe
Terena Bell, co-founder and CEO at In Every Language, an online translation provider in Louisville, Kentucky, says that the euro crisis stirred up business for her firm, which has four full-time employees, translators in 60 countries, and makes about $1 million in revenue.
What explains the increase in leads? Historically, Bell explains, it costs more to work with translators in Europe than in Latin America. In the past, Bell dealt with this by charging more for European Spanish than for Mexican Spanish, or more for European Portuguese than for Brazilian Portuguese. But now translators in Europe are eager for work, and will accept less for their services. This has translated into more business for Bell.
"What's happening right now is a dramatic pricing shift in the market," she says. "Over the last year, our costs for translation in Europe have leveled out. Our clients currently pay a lower price when they have materials localized for the European market. Now, it's just as cost effective for them to translate for Spain as it is for Argentina, which wasn't the case before."
The result, she says, is that clients are more likely to have material translated. Also, she points out that recent financial incentives put out by the Small Business Authority to encourage small businesses to export have moved more companies to have their websites translated—which has, in turn, ramped up demand for In Every Language's services.
"So, basically, the prices are lower and Uncle Sam is paying for it," says Bell. "Heck, yes, we're seeing an increase in business from that."
European Products Will Cost You Less
Ian Aronovich, co-founder and CEO of GovernmentAuctions.org, a Great Neck, New York site that compiles information about government auctions of seized and surplus merchandise, says he's taken advantage of the euro crisis by creative saving techniques.
"Our business is on the Web, so we are constantly redesigning many aspects of our website and advertising creatives," says Aronovich.
"When the time does come to adjust something, these tasks are outsourced to overseas markets including Europe. Almost all the designers from Europe were happy to accept the lowered offers that we made for their services. Due to the unstable environment, they lost lots of local business. Additionally, the euro has declined, so that was also to our advantage since we pay in U.S. dollars."
Investors Are Looking For An Edge
Even financial start-ups are noticing a boost from those investing in Europe.
Ben Letto, founder of Back to the Future trading, in Thomasville, North Carolina, says his trading tool, "Flow," has seen an increase in interest from European investors. Flow makes predictions about future stock price activity—based on a one minute chart level—making it a popular product among some day traders.
"My products are geared to help day traders and short-term investors," Letto says. "Market instability helps stir up interest among many different social classes...so I believe the recent financial situation has benefitted me in that regard. And many investors have decided to take their financial future into their own hands since they find it difficult to trust the investment 'professionals' that have grossly mismanaged their accounts."
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