"overseas Customers Prefer Small Companies"

If every small company in the United States hasn't yet heard that opulent foreign markets are eager to snap up American goods, it's not Maureen Reagan's fault. Nor will Reagan be to blame if the buyers on five continents haven't learned by the end of this year that American small business is newly determined to compete throughout the world.

As chief executive officer of Sell Overseas America, a "trading partnership" of American suppliers and foreign customers, she's been urging manufacturers and distributors here for several years to start tapping the rich export lode. Her message: Podunk, U.S.A., may be saturated, but Sri Lanka is starving for your products, and the welcome mat is out for small companies in particular.

Promoting exports is Reagan's business, but her fervor makes it plain that she's not merely addressing her own interests. The United States has no choice but to increase exports quickly, she's convinced, to meet its top-priority goals of renewed growth and prosperity.

Though she is close to her father politically on this issue, her concern with foreign trade, she insists, is not connected with politics, and in fact predates the Reagan presidency. Nor does she seek federal support for her efforts, which bear no link to Commerce or State Department programs. On the contrary, Maureen Reagan is an outspoken opponent of government involvement in the private sector. "Only business can lead business," she says.

The daughter of actress Jane Wyman, Reagan started out on the stage, moved through radio and television talk shows and into lecturing and magazine writing. Then, in the mid-1970s, with a deepening interest in journalism and business, she sought a career change.

She found it late in 1977 when two West Coast entrepreneurs, Edward Schwartz and George St. Johns, approached her with an idea for a new magazine. To be circulated around the world, it would aim to stimulate interest in California products unknown beyond these shores. Reagan agreed to join them in creating the editorial product.

Initially, she was intrigued by the project's nongovernmental nature. "This was the first time in the private sector that a magazine was designed to push smaller and medium-sized companies into export," she says. Apparently the time was right. The bimonthly Showcase, launched in January 1978, developed advertising support quickly as it drew a heavy response from prospective buyers in the 137 countries of its distribution.

But the magazine could make no impact on the long-standing problems hindering American participation in international trade. Rather, the interest it evoked highlighted difficulties clearly beyond its scope. Having glimpsed the opportunities, however, Showcase' s founders were determined to grasp them. What they saw was a chance to stake out a position for American products in world markets, reaping a profit and making a sizable dent in the U.S. trade deficit. The way to do it, they concluded, was to draw American manufacturers and foreign buyers into a single federation. Reagan, Schwartz, and St. Johns, along with a new partner, Norman E. Watts, Jr., proceeded to organize Sell Overseas America, the Association of American Export.

With funding and support from large corporations serving as charter members, the group set out to sign up small companies as members, and overseas buyers as associates, and to work toward its goal of guiding the small companies into foreign commerce. "We'll hold their hands all the way to the wharf," Reagan promised at the outset, in April 1980.

After more than a year of guiding others to the wharf, Reagan headed there herself in June to begin her trade missions. As the ambassador of small business to major international trade centers, she's seeking, by her presence and her programs, to drive home the message that the United States stands ready "to produce anything we can and sell it to anyone who will buy."

That's a big task in anyone's language, achievable only with the cooperation of American business. What opportunities await the venturesome companies prepared to cooperate? To find out, INC. contributor Joan Ford interviewed Maureen Reagan in New York, just before she left on a trade mission to Asia.

INC: How do American companies stack up in the world marketplace?

Reagan: We're just not competing. We're completely dependent on agriculture, aircraft, and high technology. That has to change; we can't go on being a sponge for everyone else's products. Our exports last year were only 6.7% of our $1-trillion gross national product, the lowest of any industrial country, and our trade deficit was $28 billion. Since each $1 billion meant the loss of 50,000 jobs, the deficit deprived nearly 1.5 million Americans of the chance to work in 1980.

We're taking all kinds of steps toward economic recovery now. We're giving tax incentives to industry, tax cuts to individuals, getting the government out of the money market -- and that's all very well. But if we don't expand our markets, there will be no new jobs and no economic stability, no matter what else we do. If we have to pur our machines together with bobby pins and rubber bands, let's do it. Let's go out there and sell our products and then we'll be able to finance reindustrialization and everything else.

INC: What are the chances of expanding our markets?

Reagan: We can do it -- there's no question about that -- if we're willing to work to regain the spirit that made this country great. The export market has traditionally been secondary to us because we've always been able to absorb our own production. So we got lazy and just sold within our own shores. Well, we can't do that any more; the domestic market is saturated now, and we have to look beyond our borders.

INC: What role can small companies play?

Reagan: There's a major role for small companies willing to take it on. Last year we guided 740 of them into export trade, from the market research stage to completion of sale and final payment on their first transaction.

Many overseas buyers, when they have a choice, prefer to do business with smaller companies. There are some very good reasons for this. first, there's the quick turnaround. Large corporations take a year or more to deliver, but smaller companies are often able to ship the first order right away. Second, the personal element counts.Overseas buyers enjoy dealing with individuals instead of with corporate bureaucracies. They also like the wider variety small companies offer.

So these companies really have the best opportunity to sell overseas. Unfortunately, very few of them are taking it. There are about 380,000 companies in the United States, but only about 28,000 sell overseas. We believe that just about every manufacturer could sell overseas, and all of them should look abroad for markets because that's where the customers have gone.

By any measure, the domestic market is shrinking in relation to foreign markets. In 1970, we consumed one-half of all industrial-country output, but now we consume barely one-third. And our annual growth rate is 2% to 3% while some other countries -- Brazil, Mexico, and South Korea, for example -- show a growth rate of 7% to 10%. We should be out there taking advantage of their growth. Latin America buys textiles from Japan -- why not from us? There's a lot of business in that area for alert small companies.

INC: If the opportunities overseas are so big, why are there so few takers among American companies?

Reagan: Part of the answer is simply that so much of small business is still unaware of these opportunities. Those of us responsible for communicating with them just haven't done a good enough job.