To sell overseas, your client will need to be able to identify buyers or partners in foreign markets. Below are some links to resources that might come in handy in that respect.
International market research is a key piece of successful export planning. It is important to critically review and assess demand for your client’s product or service, as well as factors related to a given export destination.
Finding buyers or partners overseas can be significantly facilitated by tapping the services of the Department of Commerce.
SBA’s State Trade Expansion Program, or STEP, can help fund investment in website globalization and e-commerce thru grant funds. STEP can also facilitate funding to explore foreign markets through such means as trade shows or trade mission participation.
For information on website globalization and e-commerce as tools for international sales growth, you can visit the International Trade Administration’s eCommerce Innovation Lab.
The Market Diversification Tool was developed by the International Trade Administration’s Industry and Analysis to supplement your research into potential export markets.
The Global Market Finder is a tool that will help users find detailed international trade in goods statistics for specific commodity codes, countries of destination, and modes of transportation.
Export-U’s Exporter Database includes chapters on Market Research, Country Commercial Guides, Top Market Reports, and Trade Partners to help you better understand the challenges and opportunities of global marketing and sales.
Export-U also offers webinars on Market Intelligence, Costing & Pricing, Market Approach, Global Trade Shows.
Small Business Counselors should have some familiarity with U.S. Government Rules, licenses, and other legal considerations that could impact your client’s ability to export. The links below provide a good overview and can help determine whether the exporter is required to have an export license for their product or service.
Trade.gov introduces the U.S. export regulations administered by the U.S. Department of Commerce’s Bureau of Industry and Security, the U.S. State Department’s Directorate of Defense Trade Controls, and the U.S. Department of the Treasury’s Office of Foreign Assets Control. The site also provides additional links to more in-depth training.
Bureau of Industry and Security (BIS) training seminars give you the opportunity to learn first-hand from experienced U.S. Government officials about export control policies, regulations, and practices. BIS offers introductory courses on the Export Administration Regulations (EAR) as well as in-depth courses on specific topics of interest.
BIS provides a manual for developing an effective export compliance program that can be helpful for better understanding the process.
Export-U includes a webinar on Export Controls and an exporter database module on Regulations and Compliance.
Access to capital to support and grow global business is crucial and a constant challenge for most companies. Competing globally creates additional financing requirements. Potential costs to consider include such things as:
- Increased materials, labor, and inventory;
- Product modifications for legal, cultural, or competitive reasons, including certification requirements;
- International travel to meet potential buyers or participate in trade shows; and
- Customized global marketing costs to help find distributors, build brand awareness, and generate sales.
Trade.gov is a great place to start for an excellent overview of trade finance and export credit insurance.
With domestic sales, transactions are typically made via credit or cash. With export sales, a variety of methods of payment from cash in advance, letters of credit, and/or documentary collections to open accounts are used.
SBA export financing programs provide solutions for small business exporters facing financing challenges. The client can be referred to an SBA Export Finance Manager for assistance.
EXIM’s credit insurance policies can help address these commercial and country risks, such as currency controls or regulatory changes, or political turmoil.
Export-U offers webinars on Payment Terms and SBA Export Financing and an exporter database module on Finance & Insurance.
Preparing a product to ship, choosing shipping options, and completing required documentation are critical steps in a successful export transaction.
Trade.gov provides an excellent introduction to the topic to Navigate Shipping and Logistics.
Incoterms are a set of 11 internationally recognized rules which define the responsibilities of sellers and buyers. Incoterms specifies who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistical activities.
Export-U also offers webinars on Incoterms and Export Documents, as well as an exporter database module on Documents and Forms.
Before diving into export readiness, you may want to review some key points for making the case Why Export?
Some great information on export readiness can be found in Trade.gov’s section on Learn How to Export and Are You Ready to Export?.
Trade.gov also provides information on Local Resources and Assistance and Services for Current Exporters.
View the Export-U webinar on Are You Ready to Export? for more on export readiness or their exporter database module on export basics, which includes an overview of federal agencies that support small business exporters.
Please review the notes below which provide insight on establishing and implementing an effective international trade counseling program.
Benefits of a Trade Assistance Program
- Economic impact
- Assisting established companies
- Supports ASBDC accreditation
- Professional development opportunities for existing SBDC staff
- Enhances visibility of the SBDC program
- Virtually all SBDC clients can benefit from trade assistance
How To Become a Center with Trade Assistance?
- SBA does not directly provide funding for trade assistance programs
- As with the SBDC ‘domestic’ programs, each program is localized to meet the local client needs
- Designation of SBDC International Trade Center is voluntary and not an SBA designation
Client Advising – SBDC are Not USEACs
- USDOC has many foreign posts
- Industry expertise, market access, and market expertise
- Contact and screening potential foreign partners
- Foreign standards and non-tariff barriers
- Direct knowledge of foreign government procurement practices and government contacts
- Direct knowledge of key foreign companies and industry leaders
- Access to very specific and timely market insights and potential for trade leads
Working with USEACs
- The first contract should be through the local USEAC not to the foreign post
- Co-counseling - joint client calls, mutual learning, providing specialized expertise
- USEAC help ensure stronger success in the foreign market (partner vetting, adds credibility to the exporter, likely gets stronger vetted partners, leverages local knowledge of best practices in that industry)
Importing Assistance
- Offer basic information and then step out of the way
- Knowledge of HTSUS
- Refer to a freight forwarder
- Understand the right questions they should ask of the foreign vendor
- How the first shipment should be structured (assess quality, do small shipment first)
- Help in fully understanding if the local market for the imported product exists
Center Operations
- Partnerships are critical
- Great relationships with freight forwarders
- Knowledge of key banks with international expertise and financing
- SBA national trade finance experts at the USEACs
- ExIm Regional Export Promotion Program (REPP)
- ExIm insurance brokers
- Role of any state export offices and program including the STEP grant
- Key international lawyers (IP and contractual agreements)
- Accountants familiar with export incentives (IC DISC)
- Chamber of Commerce for certificates of origin
- Contacts with US Ag Foreign Ag Service for food-related exports
- Private sector export management companies and trading companies
- Foreign Trade Zones (FTZ) locally
Partnerships – Be Involved
- SBDCs need to not only be embedded in your local business community
- But in the local trade assistance network
- DEC, WTC, USEAC, SBA, EDC, FTA!!
Making Referrals to USEAC
- When to refer? When exporter is ready to engage with the foreign market
- Get permission from the client to share past research and work with the client
- Key information to include in a referral:
- Summarize the company’s readiness to export in all dimensions including a commitment to exporting and a competitive position
- Contact details
- Past research and outcomes
- How foreign markets were selected
Training Activities
- What is the best role for international trade training activities?
- Client attraction
- Provides real-life examples to exports
- Establishes best practices
- Post-training assessment and follow up opportunities for the SBDC to support exports
Who Makes Great Presenters?
- Staff from USEACs and USDOC headquarters
- Private sector - but not as an infomercial
- Service providers
- Exporters
Michigan State’s Global Edge created a self-assessment tool to determine a company’s readiness to export. This tool can help a counselor identify strengths and weaknesses for the company making the decision to go global.
