What U.S. Entrepreneurs Should Know About Exporting Nowby
Laurel Delaney, founder of GlobeTrade.com, has been helping entrepreneurs sell abroad since 1985. The Chicago-based consultant’s new book, Exporting, is being published this month by Apress. I recently spoke with her to elicit advice for business owners who want to export. Here are edited excerpts of our interview.
Fewer than 1 percent of U.S. companies export. What made you want to write this now?
Not enough entrepreneurs and small businesses really know how to export. The Internet has been a game changer for anyone who wants to do business internationally. How do you reach customers? What do you do as a small business owner to have the world find you? Once you find those customers, how do you get paid? Once you get paid, how do you get the merchandise or the service in the hands of a potential customer?
What’s changed in the past few years to make exporting more salient to entrepreneurs?
It all has to do with social media and social networking: the tools and resources that people can use to develop the business that they’re working on. Others in remote parts of the world, provided they have an Internet connection, can find those individuals and small businesses. The ability to reach customers has changed.
What are some examples of companies with unlikely export products?
One business owner who’s currently involved in conducting clinical trials on behalf of pharmaceutical companies. How do you export that? It can be done. There’s all kinds of protocol and specifications you need to go through to make sure you’re doing it right.
There is a market for really any service export or product export, provided [the business] understands what needs to be done. I always use chocolates as an example. Even chocolate is not easy. I work with a lot of companies that export consumer goods or food products. In the case of chocolates, that’s complicated because it’s perishable.
Should small businesses target specific export markets?
The market is now 2.4 billion people online. It used to be, for example, that you would would start out in Chicago and think, where am I going to go? You do the research, find out where is a good market. Now you can immediately start to reach that 2.4 billion audience.
It’s a concept called “born global.” If you are going out to market with something cool and life-changing, when you set set up any web presence—Facebook [for example]—you really have to realize that you are instantaneously global. Anyone, from any part of the world that is connected to the Internet, has the ability to reach out to you and say, “I want to do business with you.”
Describe some of the risks of exporting.
The biggest risk is payment. If you do not know how to get paid and you go out there strong in the marketplace, thinking [you have] a $50,000 order, that’s where you’re exposed. It can be a huge risk to a small business owner, particularly if the transaction is a high percentage of their total revenue base. Believe me, it’ll take them down if they fail to collect the payment.
How important is it for small companies to visit the markets they’re potentially selling in?
Whenever a small business owner has huge potential—say a customer in South Africa has come to them and promised them $1 million of business in the first quarter of 2014. I like to say, take it as far as you can take it without actually going to that country to visit with that customer. A lot of business owners don’t have the money to travel like that.
Try to work out as much as you can work out locally, do your homework on the customer, find out if they’re legitimate, and work with your international attorney to craft a contract that states everything that’s going to be done. Once all that’s done, by golly, you better get out there.
I will never say to a client, get out there right away. I’m a small business owner. I know what it’s like to drop down $5,000 or $10,000 to make that trip. I don’t see why anyone should make that trip unless they have serious interest from a customer and are about to sign a contract with a legitimate business. When you’re signing a contract, that is your ticket.