Going Global

By Andrew

No too long ago, I came across the statistic that less than 10% of Americans have passports. Later that week, while eating dinner at a restaurant with “map-of-the-world” vinyl placemats, I asked my dinner partner (who will remain nameless) to find the UK on the map. She pointed to northeastern Canada!

Although international business may be intimidating at first, I’ve learned the global market is not the planet Mars and requires no special spacecraft to access. According to the US Dept. of Commerce, more than half of American businesses export their products.

Just like any new skill, learning to export takes a bit of time and persistence. Once you’ve started, however, it’s actually quite simple. Although Southwest Windpower is a small company, we have distributors in 88 countries and products in over 125. We learned early on that the world is indeed “flat,” as Tom Friedman puts forth in his recent book. We came to realize countries like Germany, Brazil and Sri Lanka are certainly not on other planets. We came to see how selling to the Netherlands can be as easy as selling to Nebraska.

So how should you, the small business owner, get started? First off, make sure you have a market for your product. A good way to test the market is to place an ad in a few international publications that pertain to your industry. One great starting point is Commercial News USA, the official US Dept. of Commerce magazine for American-made products and services. The US government does a great job helping domestic businesses expand. The government has some great people willing to help however they can. Some services are free and some cost a small amount. Either way, they are a quite helpful.

Here are a few more tips for getting started…

Finding distributors:

Advertising, tradeshows, word-of-mouth and your website are great ways to find distributors. Another great way is the US Dept. of Commerce. You’ll want to find the Dept. of Commerce office in your state. These offices have contacts around the world and can introduce you to the right distributors.

Placing orders:

Your customers will place orders the same way domestics order are placed. The only difference is that you will be required to produce some additional documentation. Generally, your customers will ask for quotes that include shipping. UPS, Fed-Ex or any freight consolidator can help with these details. UPS and Fed-Ex have a lot of support materials to help you with all your export papers.

Collecting payment:

Unfortunately, most of your legal rights to collect on debt stop at the US border. As a small business, the safest way to do business is pre-paid. Of course, your customer has to trust you with his/her money and trust that you will ship the product. Letters of credit are a good way to use a third party (a bank) to ensure both parties are honest. However, letters of credit cost money. They are generally not worth the extra cost if your order is under $10,000. Another way is… yes, the government. Namely, the Export-Import Bank of the United States (Ex-Im Bank). The Ex-Im Bank will actually insure your receivables. In other words, if you export a product on an open account but don’t get paid, the Ex-Im Bank will pay you. There is a fair amount of paperwork to do to get started. But once this is done, the process is very easy.

Shipping:

You can rely on the freight companies in the beginning. UPS and Fed-EX have spent heavily on programs to help make it easy to ship overseas. If you have not shipped internationally before, you might consider starting with the EU and expanding from there. Just call or go online and download all the details.

Tom Friedman’s The World is Flat describes the extent to which our world is connected. There is no question this is true. Take the time, do the research and dive in. You will expand your business in ways you never new possible and at the same time learn about the world!

Comments (1)

November 21, 2006 3:19 PM