Doing business in foreign markets

TRAVERSE CITY – You've heard there is a market for your company's product in Central America. How do you find out for sure? Or, your company has been exporting for years. Now, you've got your eye on a new market but you're concerned about the true potential. What's your next step?

Whether you're seriously thinking about moving into the global market or have been a global exporter for years, there are undoubtedly a lot of questions and concerns you will face along the way.

Experts say the opportunities are incredible and the rewards can be great. If you do your homework, it can be a vital part of your business.

Work locally,

sell globally

Michigan is the fourth largest exporter in the country, according to Kendra Kuo, international trade specialist for the U. S. Commercial Service's Export Assistance Center in Grand Rapids. New free trade agreements between the U.S. and Australia, Central America, and Chile have improved exporting opportunities. According to exporting specialists, China and India are also fast becoming players in the international market.

Northern Michigan's presence in the exporting business is significant given the relatively small size of the region.

"In the 10-county area (of northwest lower Michigan), we've identified 60 to 70 businesses that are either heavily involved in exporting or have a real interest in it," says Jim Haslinger, procurement specialist at the Procurement and Technical Assistance Center in Traverse City. "And that number is probably low."

Haslinger, who was recently appointed to the Michigan District Export Council, says people would probably be shocked at the actual number of small companies shipping products internationally, but the center doesn't have contact with all those companies to be sure of the real number.

Local companies' interest in doing business in foreign markets has also changed dramatically.

"In the past, maybe 10 years ago, companies here were reactive (in the international market)," Haslinger says. For example, it wasn't uncommon for the office to get a call from a business saying it had received a fax in Spanish, needed it translated, wondered about the safety of such a transaction, and wanted to know the best way to ship its product internationally.

But now, instead of the foreign customer making the first contact, companies here are much more proactive and boosting their profits by expanding their customer base outside of U.S. borders.

"Companies here have realized the need to do business globally," Haslinger says, adding that his office refers a lot of people to the Grand Rapids Export Assistance Center and/or to Washington to get the counseling, research, and services they need.

Exporting 101

When it comes to new exporting opportunities, businesses can be described one of two ways, either "new to export" or "new to market." Kathy Runyon of Good Wood Ventures, Inc. fits the "new to export" category. She is interested in trying to export timber from a 120-acre site near Crystal Mountain that she is going to develop into a subdivision. She says the timber will probably be a finished product, such as trim, and is eyeing the international market.

Also "new to export" is Tom Langs, operations manager for Precision Building Systems, a panelized wall manufacturer in Traverse City. He says the company is looking at doing either large-scale military or civilian housing projects in other countries, specifically in areas that don't have mills or the materials for building homes.

Both Runyon and Langs were part of a group who attended a recent seminar on exporting hosted by the Procurement and Technical Assistance Center with U.S. government trade specialists and other business experts.

"Every business owner should be asking, 'Do we have an exportable product or service,'" says Tom Maguire, manager and international trade specialist for the U.S. Commercial Service's Export Assistance Center in Grand Rapids. "The world is undergoing an earthquake in terms of industrial change."

Boride Engineered Abrasives in Traverse City is a seasoned player in the exporting business, currently selling its products in more than 30 countries throughout Europe and Asia, Australia, New Zealand, and in South America and Central America.

"A little more than 50 percent of our sales are international," says Betsi Burns, sales manager for European and specialty accounts at Boride, which develops and manufactures abrasive products for industrial and consumer applications.

Next up? Eastern Europe. The company has identified a need for its products in those countries, says Burns. Poland and Slovenia seem to be "hot beds of activity" in mold polishing, says Burns, and the company is eager to establish its brand name in the market. It already has distributors in Romania and the Czech Republic. She attended the seminar to find out what resources are available to help get established in this new market.

Burns says she is going to try the Contact List Service offered by the U.S. Commercial Service, which provides a company with a list of unscreened potential partners. She will then contact those companies on her own. She may utilize other services, but because Boride has a lot of experience in meeting with potential distributors in other countries it will depend on how many contacts speak fairly fluent English.

Haslinger points out, "It used to be new to export around here, but now the majority is new to market." BN