Five Tips for Getting Started in Exporting

Between connecting with foreign buyers and wading through complicated tariffs, exporting can be tough. Here's how to ease the process.

Darryl Barlett, co-founder of k-Space Associates
Darryl Barlett
Co-founder of k-Space Associates
Photo courtesy of the company

When the U.S. economy spun into a free fall three years ago, business owners across the country were forced to retool niches to keep their doors open. Many owners also expanded into markets outside the U.S. where consumers weren't as hard-hit.

For companies like k-Space Associates, there is a different story altogether.

"We just fell into it," says its co-founder Darryl Barlett. The company hadn't exported until a Japanese distributor first approached him at a trade show in 1995 when the business was just three years old. It only then occurred to him that a number of foreign tech companies had a need for k-Space's products.

Even so, the company -- with just 21 employees -- now ships its products to countries as far flung as Singapore, Austria and China where companies the likes of Sony, Panasonic and Nokia use k-Space's products to test and monitor the production of semiconductor chips and solar panels. This year, Barlett anticipates that 65 percent of the company's expected $8 million in sales will hail from overseas.

What's more, Dexter, Mich.-based company was recently named as the U.S. Small Business Administration's 2011 Small Business Exporter of the Year. To win this award, k-Space had to compete against fellow exporters in each state and on a regional level based on the combination of factors including increased sales, profits or growth of employment because of exporting. The company also stood out for its creative overseas marketing strategies and its willingness to help other companies get started in exporting.

But don't think that getting to this point was easy. Even Barlett who says becoming an exporter just, well, kind of happened, faced ample difficulties. Still, with a healthy dose of determination, it can be done.

Here are five tips from Barlett for getting started in exporting:

  1. Get connected. To find buyers overseas, it helps to have a contact in the country you're targeting. For Barlett, that connection presented itself through a chance encounter with a Japanese distributor who essentially purchased k-Space's products at a discount and did all of the sales legwork in Japan. Some entrepreneurs set up joint ventures or partnerships with foreign entities that have more experience selling to local buyers. Of course, these types of arrangements can involve a good amount of risk, so do some research on a company before agreeing to work with it.
  2. Put yourself out there. To find contacts, you may need to travel. Barlett recommends attending trade shows where foreign buyers and distributors might be in attendance. Each year, k-Space regularly attends about three trade shows, which are held in varying locales such as Japan, South Korea and France.
  3. Advertise. Whether it's through trade magazines that have an international reach or online advertising -- it's important to spread the word about your company, Barlett says. "Fifteen years ago, we wouldn't have this international exposure and be able to export as much as we do if we weren't just a finger stroke away," he says.
  4. Watch your cultural Ps and Qs. Although selling through a foreign distributor can make your job much easier, you may miss out on much of the upside profits , too. So, it often makes the most financial sense to sell to foreign consumers directly. But be prepared to get outside your comfort zone. Beyond the basic language barrier, exporting directly typically involves wading through varying levels of taxes and tariffs, as well as different currencies and banking practices. "Every time you go to a new country, you have to learn about new things," says Barlett. "And a lot of times, it is a struggle."
  5. Get help. To make a go of exporting, you'll either need to devote your attention to making it work or have a staffer focus on it. At k-Space, for instance, Barlett assigned a lead employee with managing the loads of paperwork that's involved with exporting. For further help with things like classifying products, taxes and tariffs -- which differ depending on where you're shipping -- k-Space reached out to a local Small Business Development Center in Detroit.

Related: Six Ways to Ease Exporting

Diana Ransom is the former deputy editor of Entrepreneur.com.
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