Presentation on theme: "EXPORT WASHINGTON ASSSISTANCE"— Presentation transcript:
1EXPORT WASHINGTON ASSSISTANCE Helping Small to Medium Sized CompaniesAchieve Global Export Success in Washington State
2Have you considered exporting your Goods and or Services into Foreign Markets? Washington State SBDC has Certified Global Business Professionals and Certified Business Advisors that will assist you in export business planning, market research, market entry and financing initiatives.
5Benefits of Exporting Increase Sales in Foreign Markets Find sales growth opportunities in foreign markets with more customers than U.S. MarketsCapture better profit margins when higher price points are available in foreign marketsHigher sales volumes can provide improved economies of scale leading to improved profitsDecrease Impact from Domestic ConditionsAvoid dependence on a limited domestic customer baseForeign markets may provide outlet for unsold, excess or outdated inventory in slow or depressed domestic markets
6Lots of customers out there 96% of the world’s consumers live outside the US66% of the world’s purchasing power is outside the US91% of Washington small businesses do not exportPopulationPurchasing PowerWashington
7Washington’s Major Export Markets Foreign Markets2013 EXPORT REVENUE TOTALSChina16.7 BillionCanada8.9 BillionJapan7.0 BillionUnited Arab Emirates4.0 BillionMexico3.2 BillionData Source: U. S. Census
8Washington Key Industry Sectors with Export Opportunities Manufacturing TechnologyAerospaceValue-Added AgricultureHealth SciencesIndustrial ControlsBio-MedicalGreen TechnologiesProfessional Services
9National Export Initiative Federal program created to increase amount of American products and services sold outside the U. S.This Program Seeks To:Improve advocacy for U.S. exportersRemove trade barriers Enforce trade rulesPromote sound economic policiesIncrease access to trade financing
10Washington State Exporting In 2010, 9% of WA State Businesses Exported(The National Average is 4 %)5 Year Goal is to GROW EXPORTING TO 18%9%18%WA STATEWA STATE9%18%
11Common Fears About Exporting It’s too RiskyI’m too smallI can’t afford itExport MythsIt’s toocomplicatedI can’t compete
13Export Readiness Center Created in 2011 as result of the National Export InitiativePart of the Washington SBDCThe SBDC provides services designed to help companies grow their business, achieve higher profits and improve operations.Cooperative effort of Washington State University, other educational institutions, economic development organizations and the U.S. Small Business Administration.
14Our Goal: Help clients conduct successful business in foreign markets Domestic MarketsForeign Markets
15How We Do It Export Advising Foreign Market Research Export Readiness Center assists Washington based small and mid-sized businesses that are new to exporting or looking to expand into new markets.Export AdvisingForeign Market ResearchExport Readiness TrainingService Provider Referrals
17Our Research and Training Foreign Market Research: Performed by staff of university internsCustom and targeted to client’s needsNo-costTraining:Export workshops – Ready, Set, Export!Low-costIncludes Expert Advise from: Trade Specialists, Attorneys, Shippers, EXIM Bank, and Export Finance Assistance Center of Washington
20Collaborative Advising Approach to Exporting International Trade SpecialistCertified Business AdvisorState & Federal Export ResourcesResearch InternsProfessional Service ProvidersEXPORT CLIENT
21Network Collaboration Two Export Readiness Centers - Seattle and in Spokane.International Trade Specialists collaborate and co-advise with SBDC Certified Business Advisors across the state.
22Export Readiness Center Locations Washington SBDC andExport Readiness Center LocationsWSBDC Export CenterWSBDC Export Center
23Export Assistance Organizations US Dept. of CommerceUSEACBureau of Industry and SecurityEXIM BANKFederal Export AssistanceState Export AssistanceWA State Dept. of CommerceWA State Export Finance Assistance CenterLocal Export AssistanceWSBDC Export Readiness CenterInt’l Trade Specialist – Spokane/Seattleexport.wsbdc.orgWorld Trade Center TacomaGeneral Business AssistanceWSBDC Certified Business AdvisorsINNOVATE WASHINGTONinnovatewashington.orgSBA
25The Path to Export Success GrowExportsEnter Export MarketsManage Export ComplianceDevelop an Export PlanEvaluate Export MarketsAchieve Export Readiness
26“Must Have” to ExportUpper management commitment and buy-in to exportingIn-depth experience with the product or serviceAdequate cash flow or financing capabilityProduction capacity and supply-chain capability to provide targeted export products or services
27“Nice-to-Have” Exporting or international expertise Foreign language abilityCultural awareness and sensitivityTravel to foreign markets
28Road Map to Successful Exporting Our Road Map approach is designed to help clientsbecome successful and sustainable exportersEVALUATE EXPORT READINESSPRODUCT KNOWLEDGEMARKET OPPORTUNITYOPERATIONS COMMITMENTFINANCE CAPABILITYDEVELOP EXPORT PLANCUSTOMIZED EXPORT PLANMARKET FIT ANALYSISMARKET ENTRY STRATEGYEXPORT PERFORMANCE METRICSEXPORT COMPLIANCEIMPLEMENT EXPORT PLANEXECUTE EXPORT PLAN & Review PerformanceIDENTIFY Under-Performing Export ProcessesESTABLISH CLEAR Performance MetricsIMPLEMENT Best PracticesFor ExportingSTRENGTHEN MARKET POSITIONBUILD Stronger Links with End UsersINCREASE Channel Loyalty & DistributionEnhance Terms of PaymentExpand Market Enter New MarketsNEWTOEXPORTMARKETEXPORT READY
29Are You Export Ready?How do you know if your business is ready to handle the Costs, Risks and Effort required to successfully export into Foreign Markets?
30Export Readiness Starts Here Clients need to become Export Ready in all FOUR critical Business AreasEVALUATE EXPORT READINESSPRODUCT KnowledgeMARKET OpportunityOPERATIONS CommitmentFINANCE CapabilityHave you successfully produced, marketed and sold products and/or services in the U.S.? Are you aware of demand in foreign markets?Have you received purchase inquiries from foreign buyers or identified international demand for your products and/or services?Do you have top management’s commitment to provide direction, financial support and critical resources to enter foreign markets?Do you have an Export Business Plan with secured financial resources that will fund your market entry and export activities?
31Evaluating Export Readiness Go to our website and do the online Export Readiness Assessment:https://export.wsbdc.org/surveyR The Export Readiness Assessment is a tool designed to help you betterunderstand your ability to begin or expand your exporting activities. The assessmentcovers the FOUR most critical areas of: Market, Product, Operations and Finance. Trade Specialists may request that you take the Assessment prior to scheduling aninitial advising session with them. This assessment is designed to give you and theTrade Specialist helpful information at the beginning of your advising relationshipwhich can make a substantial difference in jump-starting the advisor's ability to addvalue from the first visit and moving forward.
33Next Step to Export Readiness DEVELOP YOUR EXPORT PLANCUSTOMIZED EXPORT PLANMARKET FIT ANALYSISMARKET ENTRY STRATEGYEXPORT PERFORMANCE METRICSEXPORT COMPLIANCEDo you have an Export Business Plan that defines your market opportunity, return on investment and your capacity to deliver?Do you have research or data that confirms real foreign market demand with end-user pricing that will return acceptable profits?Have you selected reliable market entry methods that will minimize risks and support distribution and market growth opportunities?Have you established realistic and relevant performance metrics that helps evaluate your export business initiatives?Are you aware of current U.S. export requirements and do you have resources to establish a compliance program and procedures?
34Your Export Plan is Critical An Export Plan is not merely a document. It’s a TOOL to properly evaluate all the factors that would affect your company's ability to go international.It should define:Your Company’s commitment to international tradeReason for exportingPotential export markets and customersMethods of foreign market entryExport pricing strategyExporting costs and projected revenuesExport financing alternativesLegal requirementsTransportation methodsOverseas partnership or foreign investment capabilities
35Example Export Plan Outline Company ProfileII. Current Export StatusIII. Product Focus for Export OpportunityIV. Current Export Resources, Functions & RequirementsV Target Market Research & Country ProfileVI. Market Entry StrategyVII. Market Development Action Plan (milestones/dates)VIII. First Year Export Budget and Financing Sources
37Market Selection Involves Research Even if your business has international inquiries or has made recent sales of its product or services into foreign markets…Avoid “Reactive Market Selection” and Do Market Research to Analyze Market Fit and Minimize Risks
38Reactive Market Selection Mistakes Making sales based on unsolicited foreign purchase inquiriesFollowing a competitor by making “copy-cat” sales to compete in new foreign marketUnwittingly agreeing to a sale through middleman when your company can sale directly into a foreign marketCommitting money and resources to unqualified foreign distributors or agentsCommitting money and resources to poorly aligned foreign Partnerships
39The Benefits of Market Research Good market research improves your market entry by assisting you to:Develop target list of foreign markets to be screenedRank target market opportunities by multiple variablesSelect & prioritize markets by screened rankingsEstimate market entry resources & associated costsSelect viable market entry methodsEstimate realistic timelines for ROI
40Available Research Sources In addition to U.S. Government data bases and internet research sources, the WSBDC Export Readiness Center is provided access to private international data bases through the SBDC and their Universities to seek out the information on behalf of the company.
42Which Market Entry Method? Indirect Exporting> Export Management Companies (EMC)> Trading Companies2. Direct Exporting> Direct Sales in Country ThroughRepresentatives or Distributors3. Contractual Market Agreements> Licensing> Franchising4. Foreign Production (Equity Strategy)> Strategic Alliance> Joint Ventures (JV)> Wholly Owned Foreign Entity (WOFE)
43Risk versus Reward Market Entry Modes INDIRECTExportingDIRECTLICENSINGINVESTMENTJOINT VENTUREFRANCHISEHigh InvestmentHigher Risk Higher ControlLow InvestmentLower RiskLower ControlAmount of Investment, Risk, Control & Profit Potential
44Foreign Market Entry Resources To improve Market Entry strategy:Download and read export.gov Country Commercial Guides for your target market.Attend product relevant trade shows in U.S. or abroad.Involve an experienced bank with international services that meet your needs.Use Int’l Attorneys or Accountants - finalize distributor or licensing agreements.Establish reliable and agreed upon payment terms with foreign buyers.Attend export business and export compliance training programs (BIS).
45Foreign Market Entry Resources Use resources to find and qualify potential buyers, distributors and/or partners:KOMPASS Database - search for existing Representatives or DistributorsForeign Commercial Services - find & screen potential playersVendor Questionnaire & Profile Assessment tools - evaluate players
47Resources for Small Business Exporters Export-Finance CounselingExport Finance Assistance Center of WashingtonGovernment Export Finance ProgramsSmall Business Administration (SBA)Ex-Im Bank of the U.S.
48Export Finance Counseling Export Finance Assistance Center of WA (EFACW)Provides export-finance counseling to current and prospective exporters based in Washington State.Export-finance matchmaking by referring SME companies to banks, other lenders, and insurance brokers to support their foreign transactions.Helps clients identify prospective overseas buyers and assess their creditworthiness.
49Government Export Finance Programs U.S. Small Business Administration (SBA)Export Express Loan ProgramInternational Trade Loan ProgramExport Working Capital Program
50Government Export Finance Programs Ex-Im Bank of the U.S. - Products SupportPre-Export FinancingWorking Capital GuaranteesPost-Export FinancingCREDIT INSURANCEGuaranteesDirect Loans
51Payment Methods Cash in Advance Letter of Credit Documentary CollectionsOpen account
53Basics of Shipping overseas International Logistics:To ship a product overseas, exporters have at least four options. Many exporters rely on international freight forwarders to perform these services.Some companies utilize the services of shippers’ associations. Other companies use express delivery or mail services.
54International Freight Forwarder A Freight Forwarder is a shipping agent for moving cargo to an overseas destination by air or cargo ships.Also provide services such as:Advising on exporting costsPreparing and filing required export documentationAdvising on the most appropriate mode of cargo transport and making arrangements to pack and load the cargoReserving the necessary cargo space on a vessel, aircraft, train, or truckMaking arrangements with overseas customs brokers