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Basics of exporting taught
by Jule Hubbard
Americans make the best quality products but aren't good at selling them overseas because they often don't understand how the rest of the world works, said an organizer of a series of exporting classes under way at Wilkes Community College.
"Americans have a bad reputation in other countries for not knowing what they're doing because we only know the way it's done" in the United States added Daniel W. Holt, an international finance specialist with the U.S. Small Business Administration in Charlotte.
Speaking Thursday during the introductory session of "Export University 201" at the Brushy Mountain Smokehouse Restaurant in North Wilkesboro, Holt said Americans need to learn to do business overseas because most of the world's customers are in countries other than the United States.
He said China's percent of the world's Gross Domestic Product (GDP) is expected to grow from 4 percent in 2000 to 28 percent in 2050. He said India's GDP is expected to grow from 2 percent in 2000 to 17 percent in 2050, while Europe's is expected to decrease from 34 percent to 15 percent.
Holt told a story about an American beer manufacturer with a potential new customer in Sweden as an example. The beer maker was about to make his first shipment to the new customer on wooden pallets when he learned the beer would be quarantined in Sweden because the pallets hadn't been treated for pest insects.
"It's a misconception that you have to be big to export," he said, adding that 60 percent of firms that successfully export have fewer than 100 employees each. "It's not true that you need a substantial volume to export." It also isn't necessary to be fluent in a foreign language because interpreters are available, said Holt.
"You can have experts help you with different aspects of exporting and cover that cost with your price." A company can export on a regular basis or sporadically and can also export through an intermediary.
In some countries, he said, "it's important to spend time with people when you're trying to sell to them. Let them meet you and get to know you."
Holt said international shipping containers have greatly reduced shipping costs. After containers are loaded, they're carried by truck or rail to a port and loaded on ships. Standardization of container sizes and ships designed to carry them revolutionized the cargo industry. About 90 percent of the world's non-bulk cargo is transported on container ships.
Ree Russell, senior international trade specialist with the U.S. Department of Commerce in Charlotte, said Thursday that less than 1 percent of U.S. companies engage in exporting and half of them only export to one country. Ms. Russell will speak about the "Harmonized Code," an internationally standardized system of names and numbers for classifying traded products and other subjects.
Tony Gunter, international trade specialist with the N.C. Department of Agriculture, brings expertise in exporting lumber and other agricultural products to the series of classes.
Karen Hoskins, a lender relations specialist with the Small Business Administration (SBA) in Charlotte, will talk about SBA programs guaranteeing bank loans for small businesses.
The SBA Export Express program helps small businesses develop or expand export markets by providing exporters and lenders a streamlined method to obtain SBA-backed financing for loans and lines of credit up to $250,000. SBA temporarily provides lenders with up to a 90 percent guaranty on export loans to encourage participating banks to make loans that make the necessary export financing available.
Ms. Hoskins on Thursday said federal Recovery Act funding allowed the SBA to guarantee bank loans up to 90 percent instead of the usual 85 percent on smaller loans and 75 percent on larger ones. She said it was among the most successful stimulus initiatives. This stimulus funding ran out but was refunded and resumes this week.
In a related matter, Gov. Bev Perdue on Friday announced a new initiative to help small businesses strengthen their loan applications and increase their participation in SBA and other federally backed loan programs through North Carolina banks.
Sixty percent of small business loans are turned down because the applications aren't strong enough.
Letters of credit and other international methods of payment will be discussed during the next class session, which is from 9:30 a.m. to noon this Thursday. A letter of credit is an agreement between financial institutions to pay the exporter for international commercial transactions based on documents and not the merchandise or service involved.
Holt said information will be provided about an upcoming trade trip to Canada for representatives of companies in the Carolinas. He noted that Canada is the number one U.S. partner.
Subsequent class sessions are from 9:30 a.m. to noon each Thursday through April 22 in room 1125 of WCC's Alumni Hall.
To register for the classes, go to www.buyusa.gov/northcarolina/exportuniversity201. html. Interested people can also register when they show up at upcoming classes.
For more details, contact dan.holt@mail.doc.gov or at 704-333-4886, ext. 226 or Phylis Boyd Vanhoy at phyllis.boyd@wilkscc.edu or 838-6166 or Greg Edwards at gedwards@greatstatebank.com or 903-4948. |
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