IE Business Daily Business news for the Inland Empire.
By John W. Tulac
Willie Sutton was a notorious bank robber during the Great Depression. He was finally caught. As he was being marched off to jail, a reporter yelled out, “Hey Willie, why did you rob all those banks?” Willie replied, “That’s where the money is.”
We don’t really want to be like Willie, but as business people, we ought to be always thinking like Willie in figuring out where the money is and then go after it (legally, of course! I’m a lawyer). Unfortunately, unlike Willie, most U.S. companies don’t know or choose to ignore ninety-five percent of their potential markets. Ninety-five percent of the demand for goods, services, intellectual property, know how, and information is found outside the United States. Yes, most of the people and all their money are outside the good old USA. Most U.S. companies with an exportable product, service, intellectual property, know how, or information do not export at all.
Manufacturing makes up less than 20% of the U.S. GDP today. Eighty percent of manufacturers with an exportable product do not export. That means only approximately four percent of our companies export products. Nevertheless, the Untied States is a leading exporter of goods worldwide. Imagine the growth if more of our manufacturers alone started exporting consistently.
Many service companies do not know that they have services in demand in other countries. Even if the service may not directly be exportable, the knowledge underlying the service is something that many others elsewhere in the world would pay to learn. The official definition of an export as reported in the balance of trade statistic is limited and therefore many business people do not know and understand that they may have something the rest of the world values.
It may seem daunting to many to get started in exporting. It appears complicated and time-consuming. There is fear of the unknown, fear of failure, fear of higher costs, fear of regulatory compliance, and fear of cross-border complexities. It is easy to make excuses. It is easy to procrastinate. It is easy to let inertia keep your company from expanding into international markets. However, all of these things can be overcome with a strong commitment with good planning and preparation leading to the development and implementation of an export plan.
One of Ronald Reagan’s favorite laugh lines was to pretend to be a government worker. He’d say, “Hi, I’m from the government, and I’m here to help.” However, for decades, the U.S. government has actually been successfully assisting U.S. companies to export goods, services, and intellectual property. A lot of the government resources are absolutely free and readily accessible. Other resources carry nominal or very reasonable charges. In fact, there are so many resources, involving twenty different federal agencies, it is hard to know where to start. There is a solution for that. Start at the mega portal: export.gov. Yes, you’ll quickly get lost trying to navigate a lot of it, but just explore and you’ll soon get a picture of the potential.
You can try to do it all by yourself utilizing the government resources, but it may take you awhile and you must be willing to endure making mistakes. Do you really want to reinvent the wheel? Fortunately, there are private resources that are also available to help you get started and grow your exports. You will need the assistance of freight forwarders, bankers, insurance agents, accountants and lawyers with international business experience. Once you make your commitment to exporting, then assemble your export team. There is no need to hire more people and maintain higher payroll costs at the beginning. Outsource the more difficult tasks to the respective experts.
In the next installment, I will provide an action plan and take you through the steps to go international to increase your sales dramatically.
I invite you to attend the 23rd Annual Inland Empire World Trade Conference on May 17 from 8:00 AM to 5:00 PM at SBD International Airport, Domestic Terminal, 105 N. Leland Norton Way, San Bernardino, California 92408. “The IEWTC is a forum for businesses in the region to discuss the ever-changing state of international conference and its impact on the global economy. Featuring breakout sessions on international trade, cybersecurity, transportation, and aerospace, this conference is an excellent opportunity for business leaders to address issues and brainstorm on solutions. Whether your company has conducted export business in the past or is looking to expand into the global marketplace, attend the IEWTC and participate in valuable educational experiences that focus on advancing trade in a new era.” I look forward to meeting you there.
John W. Tulac is an international business attorney practicing in Claremont, adjunct professor of law at University of La Verne College of Law (retired), and lecturer emeritus (retired) at Cal Poly Pomona. He is peer recognized as preeminent in international business law and holds the highest ratings for competence and ethics from the Martindale Hubbell National Law Directory.
