Click to Print

Training Ground

Export help from a business incubator and more.
June 1, 1997
URL: http://www.entrepreneur.com/article/14276

In 1995, exporting was the last thing on Cassie Koehne's mind. Although she was eager to market her company's Eco-Aromatic Systems' odor eliminator product, she says, "Exporting had never entered our minds."

The Decatur Industry and Technology Center (DITC), the incubator in which Eco-Aromatics had set up shop, changed all that. Within a year, Koehne's Decatur, Illinois, company was not only selling to domestic customers but exporting successfully as well.

Most incubators offer their tenants help in launching their businesses not only domestically but also abroad. "We want to help businesses get comfortable with the idea of going international," says DITC manager Donna Bland. To that end, DITC educates companies about exporting, sends them to self-employment training classes, and hosts speakers on the subject.

Being in the incubator helped Koehne form close friendships with the other incubator tenants and former tenants--some of whom were export veterans. Through these relationships, Koehne gathered valuable exporting information and much-needed emotional support. "It's an ideal situation for starting [to export]," she says.

For a list of contacts in incubators worldwide, order a copy of the SPICA Directory 1996/97 by calling the National Business Incubation Association at (614) 593-4331. The directory costs $42 for nonmembers and $30 for members.

Making Contact

You've decided to sell your widgets in Singapore. Now what? If you don't have any business contacts there, who are you going to call?

Luckily, you can use Dover, Pennsylvania-based Coble International's Trade Directories on Disk, which works like an international export phone book. The 28 country-specific disks list more than 57,000 contacts, ranging from agents and distributors to importers and potential joint-venture partners, says company president Ronald Coble.

In addition, each disk contains such information as regional marketing quirks, tips on doing business in that country, and tidbits about the local political climate and import market.

For more information or to order the disks, which cost $20 each, call (703) 912-1765.

Top Billing

Whether you're doing business internationally or at home, success ultimately comes down to getting paid. But billing overseas customers involves more risk. Walter Ferrier, professor of global management at the University of Kentucky in Lexington, recommends keeping these five risk areas in mind when deciding how and when to bill international customers:

1. The customer: Is this a onetime deal? Do you sell to the customer periodically or on a regular basis? Depending on your answers, you may want cash in advance, a letter of credit or a revolving account.

2. The currency: Currency fluctuations may adversely affect your profits. "The risk can be hedged a little if you stipulate a currency/price adjustment scale [with your overseas customer]," says Ferrier. "For example, if the dollar and the deutsche mark differed by more than 10 percent, the price would correspondingly change by 10 percent."

3. Method of payment: If you're looking for cash in advance, remember that foreign companies have little incentive to do this. Letters of credit--bank-to-bank transactions that substitute for a lack of credit or the trust between exporter and importer--are more commonly used.

4. Timing: How long are you willing to wait for payment? The longer you wait, the more risk there is in terms of currency fluctuations and your customer's financial condition.

5. Competitive factors: A lot of exporters are afraid to bill in the customer's currency. But billing them in U.S. dollars makes them bear the currency risk. Asks Ferrier, "If your customer gets a better deal from a company that will bill them in their own currency, why would they do business with you?" Understanding foreign currency markets gives small businesses a competitive advantage.

Contact Sources

Coble International, 1420-E Steeple Chase Dr., Dover, PA 17315-3784, 105446.3012@compuserve.com;

Decatur Industry and Technology Center, 2121 S. Imboden Ct., Decatur, IL 62521;

Eco-Aromatics Systems, 2121 S. Imboden Ct., Decatur, IL 62521, (800) 326-1126, (217) 425-5721;

National Business Incubation Association, (http://www.nbia.org).