There's
one common piece of advice for businesses thinking about
expanding their international footprint, whether they’re
planning on increasing exports to China or opening a warehouse
in Europe: Do your homework.
"The most common mistake I see businesses make is not doing
their research," said Kristen Rupert, executive director of the
Massachusetts Alliance for International Business, which is
under the umbrella of the Associated Industries of
Massachusetts.
The good news is there are dozens of state, federal, public
and private organizations that help businesses expand their
international footprint.
In an increasingly flat world Rupert said more and more
businesses are thinking about how they can expand to
international markets.
Massachusetts ranks 14th in the country in terms of exports,
with nearly $17 billion exports going overseas through September
of this year. Texas is the top U.S. exporter among states, with
$117 billion being exported this year, according to the U.S.
Census Bureau.
Those totals are down 21 percent compared to the same time
last year in Massachusetts, while nationwide, exports are down
23 percent so far this year compared to last.
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Still, Rupert, whose organization runs seminars about
emerging markets, said in the economic downturn she’s seen more
businesses leaders attending seminars focused on expanding
markets and updates on new developments for reporting
regulations and compliances with the government.
One of the resources for businesses is the
Massachusetts Export Center,
a quasi-public organization that gives businesses, usually free
of charge, technical assistance on developing a plan to go
abroad.
Julia Dvorko is
the Central Massachusetts regional director for the Export
Center and said a first step for companies is to think about
their goals.
Companies take the same basic approach to expanding sales,
for example, in an overseas market that they would domestically.
"Evaluate the markets and see if there is a need and if your
product can fill that," she said.
The Export Center has information about various international
markets and can link companies up with other organizations that
study specific parts of the world.
Steven Rocheleau, president of Rocheleau Tool & Die Co. Inc.,
in Fitchburg, said exports now make up about half of the sales
at his fourth-generation family business.
He said there are a lot of technical details to think about
when exporting, which his company has become accustomed to since
they’ve been doing it for decades.
For a new business starting out, however, Rocheleau said to
expect the unexpected.
"The reality exists that there is a different level of risk
in international financial transactions," he said.
Making sales in Central America, where Rocheleau sends many
of his products, can carry inherent risks.
How will the product be delivered? How can you ensure you
will get paid? What if the order is cancelled at the last
minute?
Rocheleau said he works with well-known distributors the
company has been working with for a long time, and he said he
relies on other organizations to help him establish
partnerships. As for expanding the client base, Rocheleau said
he attends international trade shows.
One organization that helps with financing is the Small
Business Administration’s Office of International Trade. John
Joyce, the regional director for New England, said there are
multiple loan-guarantee programs available to help companies
guarantee their loans with banks, in some cases up to 90 percent
of the loan.
Some businesses already have robust international operations
that go beyond just exporting products.
Hopkinton-based EMC Corp. reported last month that 46 percent
of their third quarter earnings were from outside the U.S.
John Herrera is the vice president of global delivery for the
computer storage company and said managing an international
operation takes time, energy, and a plan.
"A lot goes into planning where we’re going to have an
overseas operation," Herrera said.
He said one of the first things the company thought about was
how to structure the international operations. The company has
leaders for specific areas of the world, such as Asia Pacific.
Then, there are country managers in each of the 60 nations
outside the United States that the company does business in. So,
each country has its own structure that may be slightly
different based on local customs, the regional marketplace and
business partners in the area.
"It’s important to have those people on the ground who have
that local knowledge," he said.
But, EMC also has corporate functions that stretch out across
the entire company. This allows the company to have common human
resources, information technology and procurement offices to not
only create efficiencies, but create uniformity in operations.
EMC recently announced a $1.5 billion investment in India,
where the company already had partnerships and sales.
Herrera said the U.S. government has many programs and
services, many of which that are free of charge, that can help
companies make decisions about where is the best place for them
to expand. And he said, companies can look to other businesses
that are already in an area they are looking to expand to and
ask for some advice.
He said one of the most important things a business leader
needs to keep in mind is the extra travel.
"Always have that bag packed and ready to go," he said.
