Archive for the 'Trade - Imports - Exports' Category

How to connect with global prospects – and get paid

In case you haven’t heard, the seven billionth Earthling was born recently.

For the global marketplace, seven billion prospects is exciting. But 96% of those folks live outside the U.S.

Once, small business growth meant expanding across town or the next county over. But new technologies and demographic shifts have made expanding outside America’s four walls increasingly compelling. It’s also produced three elemental global business questions: Who are my prospects, how do I connect with them, and how do I get paid? Let’s focus on the “Who” first, with these global stats from National Geographic, plus my editorializing.

  • Nineteen percent of Earthlings are Chinese, 17% are Indian and 4% are American. By 2030, the first two will invert.
  • In a historical shift, just over half of Earthlings are now urbanites. Remember, city folk use different stuff than their country cousins.
  • Globally 40% of us work in services, 38% in agriculture and 22% in industry. This means different things to different industries, but it means something to all businesses.
  • English is the international language of business, but is the first language of only 5% of global prospects. When doing business outside the U.S., be culturally sensitive and patient with the translation process.
  • Breaking news: 82% of your global prospects are literate. If you can read and write you can improve your life, which explains the growth of the middle class in emerging markets. A growing global middle class means millions of new, affluent consumers each year.
  • Computers are luxuries for most Earthlings, but mobile networks are exploding across the globe. Soon billions who never owned a computer or used the Internet will do both with a smart phone. What does your mobile strategy look like?
  • For American small businesses, export opportunities abound in our own hemisphere without crossing an ocean, especially Canada, Mexico, Panama, Columbia and Chile, where trade agreements are in place. But keep an eye on the Trump trade tactics, part of which may manifest in tax reform.

The good news is there are two government agencies standing by to answer questions about your export strategy. Each one provides digital information, human assistance and global networks designed to help a small business maximize its opportunity to create and execute a successful export strategy.

U.S. Commercial Services

The, “How do I connect with global prospect?” question can be answered by this agency, and it should be your first stop for education on finding and converting global prospects into customers. It’s a virtual one-stop shop for developing and executing your export strategy: a great website (Export.gov); a toll-free number (800-872-8723) answered by a real person; over 100 offices around the U.S., plus dozens more around the globe you can walk right into and ask for help; and their book, “A Basic Guide to Exporting,” which includes an excellent tutorial and several case studies. It’s all free except for the book and any direct expenses they incur on your behalf.

Export-Import Bank

This is where you get the “How do I get paid?” answer. Part of the U.S. government, Ex-Im Bank (exim.gov) will assist with the financial elements of your export sale. They’ll coordinate with the banks on both sides of the transaction to transfer funds, provide loan guarantees, and even pre-delivery working capital for you and post-delivery financing for your customer.

For generations, big firms owned the franchise on global business. But shifts in technology and demographics are making the global marketplace more compelling and feasible for small businesses. And for all the government agencies that gets in our way, these two will actually help you.

Write this on a rock … The global marketplace – and 7 billion prospects – are waiting for you.

Three new reasons to expand your market horizons

More than ever, 21st century small businesses have reasons and resources to expand opportunities beyond local markets, including international trade, and specifically exporting. Yet even though 97% of all U.S. exporters are small companies, only a fraction of that sector are exporters.

But there’s good news that should cause the number of small exporters to increase. The convergence of new technology, a global “new economy” culture more inclusive of small businesses, and believe it or not, help from the government, are making it easier for small firms to expand their market reach. But easier doesn’t mean effortless, inexpensive or justified, which are three of the key factors of any export strategy.

Let’s take a look at the possibilities of creating a trade strategy by getting help with those three factors, with emphasis on help from the government.

Effort
For a long time, exporting was the domain of those large firms that could afford to have international professionals on payroll or contract. The education and prospecting process alone was daunting enough to dampen the ardor of even the most determined prospective small exporter, let alone the actual execution of doing business abroad.

But today, it’s hard to imagine something with so much potential being as easy as walking into one of the 100+ U.S. Commercial Service offices (a Department of Commerce division) around the U.S. and asking them to help you begin the education and prospecting process. They have the staff, information and resources to get you started, and will help you along your export strategy journey. And any associated costs are minimal.

Expense
It wasn’t so long ago that someone had to physically travel to foreign markets, establish relationships with agents and customers, and then demonstrate the goods in-country. For most small businesses, those steps were financially prohibitive.

Today, that same Commercial Service office will help you find foreign prospects, coordinate introductions and demonstrations, and bring the parties together in the early stages of a relationship without prohibitive expense. It’s all done by video conference meetings in the Commercial Service office, between you and a prospect they likely helped you find. So by the time you make a significant investment, it will be spent a lot closer to fulfilling a sale. And you’ll consider any associated fees a bargain.

Justification
How do you justify developing an international strategy? Why spend time and resources trying to sell your stuff on the other side of the planet when customers are right next door? Consider these reasons:

  • More than 96% of the world’s consumers live outside the United States.
  • This year millions of Earthlings will have a smartphone for the first time who’ve never before been on the Internet or owned a computer. Don’t wait until some of them find you online to begin your international export preparation.
  • There are many examples of small businesses that minimized a downturn in the U.S. economy because their international strategy took up the slack.

New technology, new attitudes, new resources, and yes, help from the government, are bringing the world closer to your business’s door step. But you have to make the effort to meet the world halfway. Take your first step here: www.export.gov.

Write this on a rock … Education, expense, justification – check, check and check.

Is 2016 trending as the year of our next recession?

One of the distinct markers of the United States is what has been termed our “consumer economy.”

It’s pretty intuitive.

Having a consumer economy means that the main driver of GDP (gross domestic product), and therefore, the engine of economic growth, comes from spending by consumers. Other major elements that make up the entire U.S. economy include private investment, government spending and trade.

America is not unique in this distinction, but no other major economy in the world compares to the U.S. in this definition. For example, American consumers represented 71% of GDP in 2013, having risen from 62% in 1960. Around the globe, Japanese consumers are 61% of their economy, with only 36% in China. And in the major European countries, consumers average less than 60% of GDP.

The U.S. has experienced an increasingly robust consumer economy for generations. But one of the implications that has arisen for, let’s say, the past half century is that consumers are more likely to spend their money than save it. There are many reasons for this imbalance: America is the strongest economy in the world; has a diverse credit industry with creative products; and produces and imports a lot of cool stuff, which Americans want even if they have to borrow, instead of save, to get it.

The world economy has long benefited from the exuberance, rational or not, of the U.S. consumer. Indeed, during the global slowdown of the late 1990s and early 2000s, the U.S. consumer almost single-handedly kept the global economy from collapsing. But today, with a declining global economic scenario, will American consumers reprise their earlier role as economic champion? A new data point may provide that answer.

Recently, in our online poll, we asked small business owners if the significant drop in gasoline prices ($1/gallon in six months) was manifesting as increased spending by their customers. Less than one-fourth of our respondents reported such a trend was evident or slightly evident, while almost half said they saw no such evidence.

One of the reasons for the consistent moribund U.S. economy since 2008 has been the debt-reducing behavior of both American businesses and consumers. But it now seems the consumer’s cash conservatism continues unabated because, in addition to our poll results, other surveys indicate people are using the gas price dividend to reduce debt and save.

During the first quarters of 2014 and 2015 the U.S. economy went negative, producing one half of a technical recession, while the Dow Jones Index rose to new record highs. But 2016 has begun with stock indexes retrenching toward bear territory, a decline in both imports and exports, and no apparent help from consumers. Consequently, a negative Q1 this year may prove to be just the first one, rather than a one-off like the past two years.

Write this on a rock … The best way to not participate in a recession is to be prepared for one.

What I liked about Obama’s State of the Union Speech

During President Obama’s 2010 State of the Union speech he identified a number of issues that I give him high marks for. Here is my list:

Tax incentives for new hires:  The president proposed tax credits for new hiring by businesses. This is a great idea, but it’s about a year late so he needs to get this passed right away.

Free trade:  He included the need for more free trade agreements, including the one with Columbia that has been stuck in Congress for years.  He’ll have to fight forces in his own party to get this done.

Energy:  I give President Obama a high-five for proposing more nuclear power in America’s future, plus more drilling for our sovereign oil and gas deposits.  Again, he’ll have to deal with his own folks to make this happen.

Iran:  Mr Obama fired a shot across the bow of Iran; I have already predicted he would get a chance to make good on this stance in 2010.  If I’m right, we won’t have to wait long to see if Obama has the stones to back-up his rhetoric with action.

Recently, on my radio program, The Small Business Advocate Show, I talked about all of these issues.  Take a few minutes to listen and let me know what you thought about this speech. Listen Live! Download, Too!

Developing your small business exporting plan

Here’s an interesting fact: If you’re an American small business owner, 95% of your prospects live outside the U.S. Of course, there was a time when that stat meant little to most small firms. But in the 21st century, the Internet brings the world to your virtual doorstep.
Yes, if you sell something online to a customer in another country, that counts as exporting.  And Internet sales is a great way to develop a crawl-walk-run exporting strategy.  But when you’re ready to start thinking more in bulk and less in onesies, you’ll be happy to learn that there are organizations that are standing by to make full-fledged exporting almost as easy for a small business as selling on eBay.
Recently, Doug Barry joined me on my radio program, The Small Business Advocate Show, to discuss how to develop and execute a comprehensive exporting plan with help from the government organizations, including prospecting, execution and the financial elements (like you getting paid). Doug is Director of Marketing and Communications for the U.S. Commercial Service, the global business solutions unit of the U.S. Dept. of Commerce. He is also a very important member of my Brain Trust.
Take a few minutes to listen to this conversation and let us know what we can do to help you execute your exporting plans. Listen Live! Download, Too!

Small business victory over doubt

One of the tolls the Great Recession has taken on small business owners has been the tendency to allow ourselves to be overcome with doubt about our abilities as managers and leaders. But perhaps even more painful is doubt about who we are and what we stand for as entrepreneurs.

- When nothing seems to be working, “How could I let this happen?”

- When sales aren’t coming in fast enough, “Why can’t I fix this?”

- When there isn’t enough cash to fund the operation, “This is my fault.”

- Waking up at 2am, “Who am I fooling? What made me think I could actually be a real business owner?”

For small business owners there is a paradox inside of the emotion of doubt: If we never had doubts about our entrepreneurial intentions, excellence would not be possible. Doubt is part of the crucible effect that helps us create a stronger entrepreneurial alloy as we forge self-analysis with vision, planning and execution. Paradoxically, doubt, like fear, can be an immobilizer if we allow it to become personal. Consequently, small business owners must leverage doubt as a motivator.

Recently, on my small business radio program, The Small Business Advocate Show, I talked with Brain Trust member, John Dini. John is a world-class business coach and mentor to hundreds of small business CEOs in his work with The Alternative Board organization. In our discussion, John talked about how doubt has gained some traction among business owners as a result of the tough economy. Take a few minutes to listen to this interview. Listen Live! Download, Too!

Also, a while back I wrote a poem titled “Victory over Doubt.” You might benefit from reading it today.

And, as always, be sure to leave your own thoughts.




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