Easier Done Than Said

A guide to getting started in the international exportation business.

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Easier Done Than Said

Contrary to what you might think, you don't need any special experience or knowledge to get into exporting. All you need to do is start

If you're not aggressively seeking to start or increase your company's business in markets outside the United States, you're, well, nuts. Let's face it: at 1% to 2% real growth rates over the past 10 years and no relief in sight, the United States is simply not a hot market these days. The real growth is happening outside the country. Frankly, there's a gold rush out there. Business is booming in places like Korea, Thailand, China, New Zealand, Saudi Arabia, Mexico, Spain, and Indonesia. Millions of entrepreneurs are transforming ancient traditional cultures into economic dynamos. They need everything, and they need it now.

When you think about your own company's potential, there are probably three basic ways to grow. You can increase your product line, your average order size, or the number of orders. Of those three methods, the easiest is to increase the number of orders by increasing the universe of potential buyers. How better to do that than to go global, to let the world know you exist?

You hear a lot about the barriers to entering foreign markets, especially for small companies with limited resources, but my experience doesn't bear that out. At Electronic Liquid Fillers (ELF), we went from $150,000 worth of international business in 1988 to close to $6 million in 1992, almost half our total sales and all our growth. We started out with no international expertise; we didn't even know what a letter of credit was. And we're located in the industrially depressed Rustbelt of northern Indiana, half a continent away from oceans or export centers. When we started we were relatively small -- less than $8 million in sales. Over the past three years I've traveled on business to more than 42 countries, on every continent, peddling my company's liquid-packaging equipment. Take it from me, exporting is easy -- or at least much easier than you'd think.

The biggest barrier you'll face is internal, not external: you have to decide you really do want to sell to overseas markets. Once you've made that decision, everything else will fall into place. The reason I emphasize that psychological barrier is that it is very real. You have to overcome a fair amount of skepticism within your company and perhaps in your own gut as well. The objections can feel overwhelming:

We've never done exports.

What about all those tariffs, customs laws, and rules and regulations over there? We don't know anything about them.

We haven't even covered the United States yet. Why would we want to go overseas?

We're not making any money here. International orders are more expensive to handle and will lower our margins and profits even more.

It's too risky.

We're not metric.

We don't need any more business. We can't make enough to keep up with what we sell now.

It'll take years to get things going. The payback's too long.

We don't have enough people to cover the whole world.

Baloney. Exporting is just like selling in U.S. markets with a few cultural nuances thrown in. You don't have to know anything to get started. You just have to make that first sale. There are dozens of experts -- bankers, freight forwarders, shipping agents, customs brokers, trade reps, and consultants -- who are dying to get your business and to teach you exactly what you need to know to fill those first orders. That's how I learned. In fact, if you try to figure out in advance all the technical questions -- whether to go metric, for instance, or how electrical standards differ from one country to the next -- three things will happen. You'll probably identify and solve some problems, but they'll be the wrong ones; you'll become discouraged by the complexity and scope of the task; you'll delay getting into international markets. The point is, get the order and fill it the way your customer wants it. And don't worry about language difficulties, either. English is the business language of the world. Anybody worth his or her salt in the international business world either speaks English or has someone on staff who does. I've spoken nothing but English in the countries I've visited.

Before we get into the details of how to begin, let's consider some of the advantages of going international. For a start, export orders are usually larger than a typical U.S. order, and -- get this -- they are usually paid for in advance by a letter of credit or a wire transfer. You get all your money up front. Another benefit: export orders (depending on the industry, of course) usually command higher margins because the products or services are either unavailable or in short supply overseas. It's often a seller's market. Price, relatively speaking, is often less important. Plus, all kinds of overseas government money -- both from foreign governments and indirectly through U.S. aid that requires purchases from U.S. suppliers -- awaits you. Overseas customers know about that money and how to spend it with you.

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