EXPORT CENTER. Helping Companies Achieve Global Export Success. Sharon Sappington, CGBP International Trade Advisor

Transcription

1 EXPORT CENTER Helping Companies Achieve Global Export Success Sharon Sappington, CGBP International Trade Advisor

2 Washington Small Business Fair September 30, 2017 FIND CUSTOMERS OUTSIDE THE U.S. (Start or Expand Exports) Sharon Sappington, CGBP International Trade Advisor

3 Topics 1. Why Export? Is It Right For You? 2. WSBDC Export Center 3. Getting Started 4. Your Export Plan 5. Market Research and Market Selection 6. Common Market Entry Methods 7. Finding Your Export Customer 8. Mitigating Risks 9. Export Logistics

4 Why Export? Is It Right For You?

5 Common Fears About Exporting It s too complicated I can t compete I m too small It s too Risky I can t afford it

6 Top Reasons Companies Export A company s main motivation to export is to grow and increase profits. For some SMEs, there is limited opportunity in U.S. so need to look outside to find new markets and customers Today s small businesses can more easily operate worldwide

7 Benefits 1. Easier time riding out fluctuations in U.S. economy; reduces dependence on domestic market in times of recession or reduced demand 2. Higher sales volumes can provide improved economies of scale leading to improved profits. 3. Foreign markets may provide outlet for unsold, excess or outdated inventory in slow or depressed domestic markets 4. Smooths production swings and seasonal cycles.

8 Lots of Customers Out There 95% of world s customers and the fastest growing markets are outside the U.S. 70% of world s purchasing power is abroad. The world wants what America makes

9 The U.S. has 14 Free Trade Agreements (FTAs) with 20 countries Australia Israel Oman Bahrain Jordan Panama Chile Korea Peru Colombia Morocco Singapore DR-CAFTA: Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, & Nicaragua NAFTA: Canada & Mexico

10 Washington Export Activity 1997 to 2016 (Inflation-Adjusted to 2016 Dollars) Data Source: U. S. Census

11 Washington s Major Export Markets Foreign Markets China Japan Canada 2016 EXPORT REVENUE TOTALS 16.1 Billion 7.1 Billion 7.0 Billion United Arab Emirates 4.2 Billion South Korea 2.2 Billion Data Source: U. S. Census

12 Are You Export Ready? Is your business ready to handle the Costs, Risks and Effort required to export successfully into Foreign Markets?

13 Must-Have to Export 1. Upper management commitment and buy-in to exporting 2. In-depth experience with the product or service 3. Adequate cash flow or financing capability 4. Production capacity and supply-chain capability to provide targeted export products or services

14 Evaluating Export Readiness Go to our website and do the online Export Readiness Assessment at:

15 WSBDC Export Center

16 WSBDC The Small Business Development Center of Washington State (WSBDC) provides free business consulting and low-cost training services to small businesses throughout Washington State. A cooperative effort of Washington State University, other educational institutions, economic development organizations and the Small Business Administration (SBA).

17 WSBDC Export Center The WSBDC Export Center is a specialty group of the Washington Small Business Development Center.

18 WSBDC Export Center Created in 2011 as a result of President Obama s National Export Initiative. Our International Trade Advisors: - Are Certified Global Business Professionals (CBGP), a credential from National Association of Small Business International Trade Educators (Nasbite). - Have decades of international business experience including living and working abroad.

19 WSBDC Office Locations Eastern WA Export Center Western WA Export Center

20 WSBDC Export Center s Goal Help new-to-export and new-to-market clients conduct successful and sustainable business in foreign markets

21 How We Do It The WSBDC Export Center assists Washington based small to mid-sized businesses that want to start exporting and businesses that want expand their current exports. 1. International Trade Advising 2. Foreign Market Research 3. Training 4. Service Provider Referrals

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23 Collaborative Advising Approach International Trade Advisor Certified Business Advisor EXPORT CLIENT Research Interns Professional Service Providers Local, State & Federal Export Resources

24 Export Assistance Organizations (there are more) Federal Export Assistance US Commercial Service (USEAC) export.gov SBA sba.gov EXIM BANK exim.gov Bureau of Industry & Security bis.doc.gov (and ITAR) State Export Assistance WA State Dept. of Commerce commerce.wa.gov Export Finance Assistance Center of WA State efacw.org WA Dept. of Agriculture agr.wa.gov Local Export Assistance WSBDC Export Centers CGBP International Trade Advisors wsbdc.org/services/exports World Trade Center Tacoma wtcta.org Local Banks Providing SBA Loans General Business Assistance WSBDC Certified Business Advisors wsbdc.org Economic Development Centers SBA sba.gov SCORE, Veteran Outreach Center, Women s Business Center

25 WEOT The Washington Export Outreach Team is a collaborative team of local, state, regional, and federal export assistance agencies who provide the tools and resources you need to sell internationally. Export Finance Assistance Center of Washington Export-Import Bank of the U.S. Impact Washington (MEP Partner) Small Business Development Center / WSBDC Export Center Tacoma MBDA Business Center U.S. Commercial Service U.S. Department of Agriculture U.S. Small Business Administration USDA Rural Development Washington SCORE Chapters Washington State Department of Agriculture Washington State Department of Commerce Western United States Agricultural Trade Association

26 Getting Started

27 Road Map to Successful Exporting The WSBDC Export Center s Road Map EVALUATE EXPORT READINESS DEVELOP EXPORT PLAN IMPLEMENT EXPORT PLAN STRENGTHEN MARKET POSITION NEW TO EXPORT NEW TO MARKET PRODUCT KNOWLEDGE MARKET OPPORTUNITY OPERATIONS COMMITMENT FINANCE CAPABILITY CUSTOMIZED EXPORT PLAN MARKET FIT ANALYSIS MARKET ENTRY STRATEGY EXPORT PERFORMANCE METRICS EXPORT READY EXECUTE EXPORT PLAN & Review Performance IDENTIFY Under- Performing Export Processes ESTABLISH CLEAR Performance Metrics BUILD Stronger Links with End Users INCREASE Channel Loyalty & Distribution Enhance Terms of Payment EXPORT COMPLIANCE IMPLEMENT Best Practices For Exporting Expand Market Enter New Markets

28 Road Map to Successful Exporting The WSBDC Export Center s Road Map EVALUATE EXPORT READINESS DEVELOP EXPORT PLAN IMPLEMENT EXPORT PLAN STRENGTHEN MARKET POSITION NEW TO EXPORT NEW TO MARKET PRODUCT KNOWLEDGE MARKET OPPORTUNITY OPERATIONS COMMITMENT FINANCE CAPABILITY CUSTOMIZED EXPORT PLAN MARKET FIT ANALYSIS MARKET ENTRY STRATEGY EXPORT PERFORMANCE METRICS EXPORT READY EXECUTE EXPORT PLAN & Review Performance IDENTIFY Under- Performing Export Processes ESTABLISH CLEAR Performance Metrics BUILD Stronger Links with End Users INCREASE Channel Loyalty & Distribution Enhance Terms of Payment EXPORT COMPLIANCE IMPLEMENT Best Practices For Exporting Expand Market Enter New Markets

29 Export Readiness Starts Here EVALUATE EXPORT READINESS Clients need to become Export Ready in all FOUR critical Business Areas PRODUCT Knowledge Have you successfully produced, marketed and sold your products and/or services in the U.S.? MARKET Opportunity OPERATIONS Commitment Have you identified international demand for your products and/or services? Have you received purchase inquiries from foreign buyers? Do you have top management s commitment to provide direction, support and critical resources to enter foreign markets? FINANCE Capability Do you have secured financial resources that will fund your market entry and export activities?

30 Your Export Plan

31 Road Map to Successful Exporting The WSBDC Export Center s Road Map EVALUATE EXPORT READINESS DEVELOP EXPORT PLAN IMPLEMENT EXPORT PLAN STRENGTHEN MARKET POSITION NEW TO EXPORT NEW TO MARKET PRODUCT KNOWLEDGE MARKET OPPORTUNITY OPERATIONS COMMITMENT FINANCE CAPABILITY CUSTOMIZED EXPORT PLAN MARKET FIT ANALYSIS MARKET ENTRY STRATEGY EXPORT PERFORMANCE METRICS EXPORT READY EXECUTE EXPORT PLAN & Review Performance IDENTIFY Under- Performing Export Processes ESTABLISH CLEAR Performance Metrics BUILD Stronger Links with End Users INCREASE Channel Loyalty & Distribution Enhance Terms of Payment EXPORT COMPLIANCE IMPLEMENT Best Practices For Exporting Expand Market Enter New Markets

32 Your Export Plan is Critical It s not merely a document. It s a TOOL to properly evaluate all factors that will affect your company's ability to go international. Helps define your export aims and match resources to those aims Identifies actions needed to become export-ready, develop or expand exports, and how much it will cost Essential in any application for financing Ultimately will become a part of your company s overall Business Plan.

33 Write Your Own Export Plan!! Your strategy and export plan is uniquely yours. Do not borrow another company s plan and simply change names and numbers Write in simple language It needs to demonstrate why and how your business will be successful and provide strategies for overcoming challenges The first draft may be quite short. Over time it can be revised and refined, with additional information, market data, and planning elements, becoming more detailed and complete

34 Market Research & Market Selection

35 Market Selection Involves Research It is critical to research even if your business has international inquiries or has made recent sales into foreign markets. Avoid Reactive Market Selection Perform Market Research to Analyze Market Fit and Minimize Risks

36 Reactive Market Selection Mistakes Making sales based on unsolicited foreign purchase inquiries Following a competitor by making copy-cat sales to compete in new foreign market Unwittingly agreeing to a sale through middleman when your company can sale directly into a foreign market Committing money and resources to unqualified foreign distributors or agents Committing money and resources to poorly aligned foreign partnerships

37 Available Research Sources In addition to U.S. Government data bases and internet research sources, the WSBDC Export Readiness Center is provided access to private international data bases through the SBDC and their Universities to seek out the information on behalf of the company.

38 Common Market Entry Methods

39 Which Market Entry Method? Indirect Exporting Export Management Companies (EMC) Export Trading Companies (ETC) Direct Exporting Direct Sales in Country Through Representatives or Distributors Contractual Market Agreements Licensing Franchising Foreign Production (Equity Strategy) Strategic Alliance Joint Ventures (JV) Wholly Owned Foreign Entity (WOFE)

40 Risk versus Reward Market Entry Modes INDIRECT Exporting DIRECT Exporting LICENSING FRANCHISE JOINT VENTURE DIRECT INVESTMENT Low Investment Lower Risk Lower Control Amount of Investment, Risk, Control & Profit Potential High Investment Higher Risk Higher Control

41 Find Your Customers

42 Finding Your Export Customer You decided on your target market, your export plan is in good shape and you identified possible entry modes. Now you re ready to look for your buyers! Start considering who to approach and how Create a profile of your ideal international partner based on your selected entry mode (distributor, agent, or some other kind of intermediary. Utilize various resources and methods of identifying customers

43 Resources and methods to find potential buyers, distributors and partners Ask peers, bankers, freight forwarders, supply chain managers for tips and referrals Industry and trade associations Foreign Commercial Services Gold Key Research various databases such as Kompass to search for existing representatives or distributors Trade shows in target market Inbound and outbound trade missions Trade shows in US that attract international buyers

44 Mitigating Risk

45 Mitigating Risk Doing international business takes research and due diligence. To secure your investment of time and money, you must: Protect your intellectual property (IP) Reduce your payment risk Stay on top of compliance

46 Risks in Export Business Doing business internationally creates opportunities. However this comes with risks, particularly for SMEs. Types of export risks include: Economic Competition Legal Sales Political Human Resources Product Distribution IP Culture

47 Export Logistics

48 International Logistics The Process of planning and managing the flow of goods and products in your company's supply chain from acquisition to customer purchase, where part of the process involves crossing at least one international border.

49 Major Components and Considerations of International Logistics Packing Labeling Documentation Insurance Mode of Transport Regulations Tariffs and Import Fees Schedule B and HS Numbers Incoterms 2000 Export Compliance

50 Freight Forwarders and Customs Brokers are Advised Most exporters rely on an international freight forwarder because of multitude of considerations involved in physically exporting goods. Freight Forwarders - Agents for moving cargo to an foreign markets by land, air or cargo ships Customs Brokers - Responsible for clearing products through customs when shipping globally - Many freight forwarders are also customs brokers

51 Our Export Centers Western Washington EXPORT CENTER Located in Seattle - Serving all of Western WA Sharon Sappington sharon.sappington@wsbdc.org (206) Eastern Washington EXPORT CENTER Located in Spokane - Serving all of Eastern WA Vern Jenkins vern.jenkins@wsbdc.org (509)