Take Your Small Business Global

Copywrite 2010 Michael McDermott 804-248-1837 www.SmallBusinessCoachVA.com
Michael McDermott
Author: “2009-2011 Recession Survival Guide –
414 Actions Businesses Can Take to Weather the
Storm and Boost Profits”
804-248-1837
www.SmallBusinessCoachVA.com
YOUR HOST & SPEAKER

 Drastically reducing expenses and headcount.
 Eliminating all marketing (oops!)
 Borrowing on credit cards to finance daily
operations. (ouch!)
 Looking for a wealthy partner
 Looking for a bank loan (dreamer)
 “Borrowing” from your payroll tax account
(DANGER!)
 Human sacrifice (your banker)

70% of America’s economy
depends upon
domestic spending
(selling fast food and
haircuts to each other)
But America’s consumers are
holding back
spending until the housing market and
employment prospects improve

95% of the world’s
consumers
are located
OUTSIDE of the U.S.
If you’re not selling abroad
it’s time you did!

 Less than 1% of America’s small
businesses are exporters.
 Small businesses account for 30% of all
U.S. exports and for the vast majority of
growth in new exporters.
 More than two thirds of U.S. exporters
have fewer than 20 employees.
 More than two thirds of SMB
(small/medium business) exporters are
service companies/non-manufacturers.

President Obama has set a goal of doubling U.S. exports
over the next five years with the National Export Initiative.
 Expand trade advocacy, especially for small & medium-sized
enterprises. Includes educating U.S. companies about
opportunities overseas, directly connecting them with new
customers and advocating more forcefully for their interests.
 Improving access to credit with a focus on small & medium-
sized businesses that want to export.
 Continuing rigorous enforcement of international trade laws
to help remove barriers that prevent U.S. companies from
getting free and fair access to foreign markets.

Last year, 70 million people joined the
emerging-market middle class, with incomes
between $6,000 and $30,000. 1 billion
people are expected to join the middle class
by 2020. Growth is coming in China, Brazil
and India.

The Chinese bought
more cars last year
than Americans did
India has as many
Internet users
as the U.S

 Construction Design, Engineering
 Banking and Financial Services
 Insurance
 Computer and Data Services
 Cell Phone Apps
 Technical Processes Improvement
 Environmental Consulting
 Teaching/Educational Services
 Legal and Accounting Services
 Couriers
 Freight Forwarders or Consolidators
 Customs Brokers
 Trade Show Organizers

• The Central America-Dominican Republic-United
States Free Trade Agreement (CAFTA-DR)
• The North American Free Trade Agreement (NAFTA)
Trade agreements have lowered tariffs
and removed other obstacles
to exporting and importing:

 NOT China
 China
 Mexico
 Japan
 Germany
 United Kingdom
 South Korea
 France
 Netherlands
 Taiwan
 Brazil

 Canada (!)
 China
 Mexico
 Japan
 Germany
 United Kingdom
 South Korea
 France
 Netherlands
 Taiwan
 Brazil

 Direct Exporting: overseas sales where the
producer or provider controls all of the
production, marketing, sales, shipping, etc
activities and claims all of the risks and
profits.
 Indirect Exporting: overseas sales through an
intermediary who takes a commission on sales
or who purchases the goods and resells.
While there may be less of some types of risk,
there is also less profit.

Small and medium-sized businesses don’t
always have the financial, technical, human or
information resources to engage in traditional
direct exporting…with one exception.

 eBay: www.ebay.com
http://pages.ebay.com/sellerinformation/growing/
international.html
 Alibaba: www.alibaba.com is focused upon B2B
market and is an English-language website
primarily serving Small and Medium-Sized
Enterprises (SME's) in the international trade
community. One million registered users from
over 200 countries. 300,000+ daily visitors
including global buyers and importers looking to
find and trade with sellers in China and other
major manufacturing countries.

 Amazon: www.amazon.com
 Dedicated Website or a TAB on your landing
page for the country you want to market
toward.
 Virginia Business Pipeline – Virginia based
businesses can post a website, search/post
RFP’s and export. www.virginiabusiness.org

 U.S. Commercial Service – Featured U.S.
Enterprise (F.U.S.E.).
www.buyusa.gov/home/fuse.html ,
www.export.gov
 $150 for a listing in five foreign markets.

F.U.S.E. Listing

 Set up your most professional-appearing website
FIRST, before you begin to market. Get it translated
in the language of your target market.
 Start small, test the waters, check out reviews, take
advantage of the experience of others by reading
blogs; research a lot before you do anything. Caveat
emptor.
 1/2 of online shoppers abandon their shopping carts
(av cost = $109) multiple times due to high shipping
costs, security concerns and lack of convenience.
Make the checkout experience as painless as possible.
 High shipping costs is a major cause of shopping cart
abandonment, especially when shipping costs aren’t
provided upfront. Almost ½ of online shoppers might
have completed their purchases if they had known
about those costs earlier in the shopping process.

 Use a one-stop payment solution with payment by
credit card or PayPal, money order, bank account
draw. Many customers in China do not use credit
cards.
 Increase conversions (visitors who actually buy
something) with free shipping, coupons and
discounts.
 Minimize requests for personal and financial
information.
 Make transactions fast and easy.
 Make sure your site can be viewed by mobile
devices. In some countries, many potential
consumers extensively use handhelds to search
the Web.

Indirect exporting offers several
methods that can take your
business global relatively
quickly, inexpensively and
without a lot of risk.

Export Management Company/Agent and
Export Trading Companies: connects
domestic sellers with foreign buyers. The
difference is that EMC’s earn a commission
on sales while ETC’s purchase from the
manufacturer, markup and resell products.
EMC’s are typically industry and
country/region specific. Generally, you
need to know where you want to sell in
order to track down an EMC for that
region. Good EMC’s can be hard to find.

 VEDP, www.exportvirginia.org/directory.
Contact Mark Myrick, VEDP Trade Manager,
804-545-5755 to help you identify the right
country/region to market your goods or
services.
 Contact the U.S. Export Assistance Center in
Richmond: 804-771-2246, Eric McDonald-
Director, http://www.buyusa.gov/virginia/

 Federation of International Trade Associations:
www.fita.org
 Your industry trade association
 Your industry marketing publications
 Global Export Import Directory

http://globalexport.usaexportimport.com/

 Licensing – license a foreign company to
manufacture your branded product. This strategy
is useful to establish a market presence and
generate revenue in foreign markets where there
are barriers to direct entry.
 Joint-venture required in China and India
 Drop shipping (a customer purchases
merchandise from YOU but it ships directly from
the manufacturer/distributor directly to your
customer world-wide).
 Hire an employee who has created or worked in a
global product or service provider.
 Hire a consultant to take your product or service
global.
 Buy a business that is already global.

 VEDP, Virginia Economic Development
Partnership, will perform FREE market
research for your product (if you are a VA
company). Terri Noll, 804-545-5764.
www.exportvirginia.org
 U.S. Commercial Service:
www.export.gov/mrktresearch/index.asp

 Recognize that culture, language, literacy,
branding, pricing, competitive positioning,
product life cycle, climate conditions and local
marketing regulations vary between countries
and regions within countries.
 Find a drop shipper: Thomas Register,
www.mydssd.com ($300 lifetime registration)
 Go to international trade shows.

 Create an international eCommerce website in a
matter of hours and start posting products and
services.
 “Going Global” through traditional direct exporting
(and avoiding commissions) is not a quick process. It
requires preparation and patience but it could be
worth the effort. NOW is the time to learn, get
acquainted with overseas distributors, practice on a
small scale for when the middle class in China, South
America and India breaks out over the next 3-5 years.
 Take the traditional route and spend a year in the AIM
(Accessing International Markets) program through
the Virginia Economic Development Partnership.

AIM Program Summary
AIM is a one-year export program that helps Virginia companies
pursue new leads in one target country internationally.
AIM encourages clients to adopt a systematic, proactive approach
to the export process which minimizes risks and maximizes returns.
• Must be in business for at least two years in Virginia.
• Must employ at least ten full time employees in Virginia.
• Must generate at least $1million in annual sales in Virginia.
• Must commit to travel to their target market via a VEDP Market Visit
during their time in the program. A list of target markets served is at:
http://www.exportvirginia.org/schedule_market_visits.html

AIM Program Summary
$5000 to Offset Export Expenses
Strategic Research & Consultations
Focused Export Training
In-Country Matchmaking Assistance
Private Sector Experts

AIM Program Summary
• The AIM Program accepts 20 clients a year.
• Classes of ten start the first of January & July.
• Applications are due the first of June & December.
• Program details and applications are available online at:
http://www.exportvirginia.org/aim.html

VALET
Virginia Leaders in Export Trade
A program targeted at larger, more established companies. Each
year 15 qualifying Virginia businesses are selected to participate
in a two year program to expand their global marketing efforts.
Participant companies are provided with tools and resources to
increase their international sales.
On average, graduate companies experience an 88% increase in
international sales during and immediately following the
program.
For more information, contact VALET Program Manager,
Mario Camardilla at (804) 545-5753

VALET
Virginia Leaders in Export Trade
To be considered for participation in the VALET Program applicant
companies must be Virginia-based companies with established domestic
operations which are committed to international export as an expansion
strategy. VALET Program participants must request entry to the
program and meet minimum requirements:
• 20 employees
• Established 3 years
• $2 million in annual sales
• $20,000 commitment toward export trade
• Participate in one VEDP trade event
• Complete international market research

Always try to finance
expansion without going
into debt or giving up
equity. But if you need
financing to expand with
a thoroughly researched
Export Plan, there are
sources.

http://www.business.gov/expand/import-export/exporting/export-financing.html

http://www.exim.gov/smallbiz/index.html

http://www.sba.gov/financialassistance/prospectivelenders/7a/elp/index.html

 Willingness and ability to service after the sale.
 Potential for lots of frequent flyer miles
 Patent, copyright, laws are different for each
country
 General business climate, laws might be more
“flexible” and lax than in the U.S.
 Everything takes longer to do and requires a lot
of “relationship management”
 Getting paid; collections
 Currency price swings
 Inflation
 Political instability
 Corruption
 Government interference

A Basic Guide to Exporting - 10th Edition Now Available!
A Basic Guide to Exporting takes the
mystery out of entering the global
marketplace! It is a very complete primer for
small to medium sized businesses that are
contemplating entering the international
marketplace or are new to international trade
transactions. From finding and developing
international markets and customers within
those markets through to the actual
shipment of the goods to your new foreign
customer, A Basic Guide to Exporting will
take you step by step! Enhance your
knowledge, save yourself time, and increase
your chances of success in international
business and buy A Basic Guide to
Exporting. 254 pages, ISBN#
9780160792045
(about) $18.00
www.unzco.com
www.amazon.com

http://hq-intranet04.ita.doc.gov/bid/export_questionnaire.asp

http://www.exportvirginia.org/

http://www.sba.gov/aboutsba/sbaprograms/internationaltrade/exportlibrary/sbge/OIT_SB_GUIDE_EXPORT_INDEX.html

www.trade.gov

http://www.business.gov/expand/import-export/exporting/

U.S. Export Assistance Center
Provides export-ready, already established small and medium-
sized businesses with local, personalized export assistance by
professionals from the U.S. Small Business Administration, the
U.S. Department of Commerce, the U.S. Export-Import Bank and
other public and private organizations. Try them for sources of
Export Management Companies/agents.
Richmond , VA
Eric McDonald - Director
804-771-2246
http://www.buyusa.gov/virginia/

If you can’t export your services,
import your customers
 Medical tourism into the U.S.
 270,000+ foreign students in American
schools, many from China and India.
What products or services can you offer
that will import customers?

 Follow your own supply chain for international contacts
 Mark Myrick, International Trade Manager, VEDP, 804-
545-5755,
 Banking: BB&T, Wendy Dahl, V.P. International
Services Division, 804-787-1314, wdahl@bbandt.com
 International Trade Law: Karen Bland, P.C., 757-926-
5296, www.blandlaw.net.
 Elizabeth Morgan, AIM Manager, VEDP, 804-545-5768,
VEDP, www.exportvirginia.org
 Virginia International Business Council:
www.vaibc.org
 Michel Zajur, VA Hispanic C of C, 804-378-4099
 Dr. Van Wood, Professor of International Business,
VCU, 804-828-1746, vrwood@vcu.edu

Export Legal Assistance Network –
www.exportlegal.org offers one free initial legal
consultation on issues a new exporter will encounter.
Sponsored by the Federal Bar Association, Dept. of
Commerce and the SBA. Bring your Export Plan!
John M. Huddle, Esq.. CEO & Attorney at Law
The Global Law Group, PLC
The Ironfronts Building
1011 East Main Street, Suite 100
Richmond, VA 23219
Telephone: (804) 788-4480
E-mail: jhuddle@TheGlobalLawGroup.com

According to Business Week,
most U.S. companies should be
getting one-third to one-half
of their revenues from
outside of U.S. borders.
It’s time to go to
where the buyers are!

Available from the author:
Mike@SmallBusinessCoachVA.com
$10.00 (shipping included)

Thank You!
Selling products or services internationally is just one
way to improve profits. Did you know that 80% of your
profits are influenced by only 20% of your daily
activities? Are you focusing on the right activities to
increase profits? Call me for a FREE initial consultation
on a “profit tune-up” for your business.
Michael McDermott
Profit Improvement Coaching
804-248-1837
www.SmallBusinessCoachVA.com

Take Your Small Business Global

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