Export expertise - small business and foreign markets; includes related article on books and seminars - company profile

Nation's Business, Jan, 1988 by Steve Golob

Export Expertise

If you're looking to expand your company's market but you're concerned about selling in strange lands, you can find plenty of familiar folks here at home to help you. You just have to know whom to look for and where to find them, which is what this section is all about.

But first, if you're not looking to expand, then consider the competition that is looking to do so--at your expense. Competitors for your market share are constantly working to make their production more efficient or their product better designed. Exporters have an edge in this competition because they are the first to learn of new efficiencies and designs from abroad.

All U.S. exporters benefit when the dollar is down and the economies of foreign markets are strong. The time is now. For U.S. companies with goods and services that are technologically advanced, or unique or simply unavailable overseas, the time is always. Now, the rewards are greatest.

Some 250,000 U.S. manufacturers have products with export potential, experts say, yet just 250 firms account for 80 percent of America's exports. And nearly half of the total overseas sales of those 250 firms are made by the top 50.

Nevertheless, while these exporting behemoths roam the world, small and midsized companies can carve their own comfortable niches in overseas markets.

Take the case of National Graphics.

Back in 1974, Bob Gould started the lithographic film-making firm. He had seven employees, and he went after the U.S. market from his base in St. Louis. Even though his new firm already had nine U.S. competitors, Gould didn't look to overseas markets.

National Graphics has since grown to 100 employees largely because of sales abroad. It might even owe its survival to the first of those sales.

When the domestic competition forced National Graphics to switch product lines to photographic papers and chemicals, Gould salvaged operating funds by selling his leftover lithographic film at a discount to a buyer in South Korea. Then he set up an overseas marketing system that allowed National Graphics to enter foreign markets with less capital than might have been required, but with slightly lower profits than might have been expected.

Under the system, overseas distributors pay all shipping and related costs, as well as expenses for advertising, marketing and technical services. In return, these distributors receive a discount larger than that given to National Graphics' U.S. distributors.

"We distinguished ourselves through our marketing," explains Gould's daughter Elizabeth, who is now second-in-command at the company. The unusual marketing system allowed National Graphics--with its different product line--to expand overseas in the shadow of its three U.S. competitors, whose 1986 export sales totaled $5.6 billion.

Elizabeth Gould warns small businesses that aren't exporting: "You can be selling in the United States--and be fat and happy--then have some foreign competition come in. In order to remain viable, it is very important to learn other markets."

For companies concerned about taking that first step overseas, she adds, "There is a lot of help out there." She cites the U.S. Commerce Department's district office in St. Louis as being particularly helpful to National Graphics.

Commerce is the federal agency most responsible for promoting and facilitating exports. The department has 1,200 trade advisers in 67 offices in this country and 127 offices in 66 other countries.

But before meeting with one of Commerce's trade advisers, consider spending $19.50 on two books put out by the department.

A Basic Guide to Exporting ($8.50) is a beginner's bible, containing all you need to know to get into exporting. For instance, it has addresses and phone numbers not only for the 194 Commerce offices mentioned above, but also for 521 other groups, public and private, in the United States and abroad. All offer information for U.S. exporters.

The guide also takes the first-time exporter through the steps from making the first export sales contact to collecting the cash for the goods or services, introducing all the intermediaries along the way and explaining what they do. The book even has information on 140 other books and periodicals covering specific areas of interest to U.S. exporters.

The other book that would be a wise investment ($11) is Partners in Export Trade, a state-by-state directory with information on 4,500 companies, including banks that finance exporters; companies, manufacturers and service organizations that are exporters; and management companies, research firms and others that assist exporters.

The books are available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402; (202) 783-3238.

The books' lists of organizations and companies are all-inclusive. They do not distinguish, say, an established, full-service trading company from a beginner with a Teletype machine trying to conduct world trade out of a broom closet. That's your job.