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How to Grow Your Business With International Trade
Hear our panel of exporting experts as they discuss helpful resources your company can leverage when venturing into foreign markets.
International trade can be a powerful way to grow your business, but where do you even begin? Exporting requires navigating a complex financial and regulatory terrain — and the Export–Import Bank of the United States is a powerful resource that helps small businesses do it.
To learn more, Entrepreneur hosted a conversation on Clubhouse with leaders of the agency (known as EXIM) and business leaders who could speak to their own personal experience. The discussion was full of resources and important steps for any business who's exploring sales outside American borders.
Below, you can hear the conversation or read a transcript of it. The people you'll hear are:
Jason Feifer (Editor in Chief @ Entrepreneur Magazine)
Jennifer Krause (Managing Director, EXIM)
Aerek Stephens (Export Finance Manager, EXIM)
Keith Jackson (VP, Channel Sales at Eyetech Digital Systems)
Kat Cole (Advisor, investor, Ex COO & President at FOCUSBrands)
Jason Feifer: My name is Jason Feifer. I am the editor in chief of Entrepreneur Magazine, and what excites me most about the conversation we're gonna be having in this hour is that this is the kind of subject that I don't it we talk about nearly enough. You know, on Clubhouse there, there are so many rooms about marketing and advertising and all that stuff is really important, but boy, when you're talking about growing a business and really scaling it out, you better understand the international trade. And we have the absolute experts on that with us today.
You know, what we're gonna be doing here today in this hour is we're talking about growing your small business with international trade. We're gonna be focusing on international trends, advice for small businesses looking to export, and we will be taking your questions as well so you can engage with our panel of experts. And we're doing it with, like I said, the folks who know this space best, the exporting and importing space, and that is folks from the Export-Import Bank of the United States. We're also gonna be joined by some special guests who can speak to their own entrepreneurial experience in exporting and importing.
And what you might be wondering is the Export-Import Bank of the United States. I will read the brief description from their website and then I'm gonna turn it over to somehow who can actually explain it far better than I can. The Export-Import Bank of the United States is the official export credit agency of the United States. So EXIM, that's how wit's pronounced, E-X-I-M, EXIM is an independent executive branch agency with a mission of supporting American jobs by facilitating the export of U.S. goods and services. So I wanna start getting into this conversation we have got some amazing experts here and we have a lot to cover. So let's start with this.
I wanna turn it over to Jennifer Krause, who's manage- uh, a managing director at EXIM. Uh, we also have a expert finance manager in Aerek Stephens up here and, as well, Keith Jackson, VP of channel sales at EyeTech Digital Systems, who's gonna be speaking later to the experience from an entrepreneur of importing and exporting. But Jennifer, let me turn it to you first so that you can give us an overview of the Export-Import Bank and what entrepreneurs should be thinking about as they address this very big complicated subject.
Jennifer Krause: Absolutely. Thanks, Jason. Thanks, Adam, for setting us up and involving us. The Export-Import Bank is, is actually a really small government agency by the standard of, of government agencies, we're about 500 employees. So we're lean and mean and a lot of us are, are former folks who have worked in the private sector, maybe even owned our own companies that were exporting or worked for companies that export, or come from the banking sector and working with exporters in that space. So a lot of us understand the, what companies have to go through to, to get their products and their services overseas. So we feel like we bring, you know, a uniqueness to the space in that regard.
The Export-Import Bank, believe it or not, is actually a private corporation that's owned by the government, which makes us defacto government employees [laughs]. So, we are kind of spaced out into different departments. Some of us specialize in the aerospace industry and work on aircraft exports and everybody knows, we're affectionately referred to as the Bank of Boeing. So we do a lot of work with Boeing aircraft that go overseas. But in fact 90% of the transactions that we do are for U.S. small businesses. And a, a U.S. small business is, is a company that's 500 or less employees as a manufacturer, or typically, just 100 or less employees as a distributor. So in fact, we're working with companies that aren't the Boeings of the U.S.
And on a day to day basis, we're talking to these companies about what government programs they can access through us and other federal partners and state partners that we have, and in increasing their exports or getting them into exporting, 'cause they've dominated, you know, what they feel like the U.S. market is and kinda maybe maxed out that space, wanna see what other countries have to offer. And we have seen quite a success with companies who diversify and, and are shipping to not just U.S. customers but overseas. If you think about there are dips in demands in certain markets. It's, it's really a smart move to diversify and not just be selling to the U.S. market so we're helping counsel companies on that success that other companies have had.
Jason Feifer: Jennifer, thanks for that background. It's really valuable. Let me ask you to offer some color and specifics to the small business side of this, because I imagine there are a lot of founders and people who work at small businesses in America who might kt, you know, "I would love to expand beyond American, but I don't even know where to begin and I don't know that I am set up for it." So when you start talking to small businesses, and maybe it would be helpful to give an example or two, what are you looking for and, and where do you see them in their own journey where it's time for them to start thinking about and approaching exporting?
Jennifer Krause: Mm-hmm [affirmative]. Yeah, that's, that's a good point. We, we've seen companies where they were working in a large company. I can think of some ladies in South Florida who were working at 3M and they, they left to start their own company. You know, they had worked there many years o-over a decade and said, "Hey, I think we can do this ourselves." And also, 3M, I believe at the time, wa- may- was maybe moving out of doing business in certain countries and, and these ladies were, were, some of them were from those countries, so they felt the comfort in that. A-and there are many people who come to the U.S. to live and work here but they're from somewhere else, so, so they know they have the expertise of potentially going back to their own country, but then they diversify again from there, to sell into a neighboring countries.
From a novice exporter to one that becomes an experienced exporter after a couple of years, there are varying state and federal assistance programs. One that I would definitely mention for companies that are getting going in that export special is the Small Business Development Centers that are around the country. The SBDC help companies learn what they need to know to become export ready, and that can be from a financial side or even a paperwork side of getting their product out of the country, you know, filing certain paperwork, a great resource. That's americassbdc.org. Americas is plural.
After working with the SBDC for a little while, a company may start to work then with the U.S. Department of Commerce. It's an international division of the, of the Commerce Department. And this agency has offices in every state, sometimes even multiple offices in the major cities within each state as well as even more offices that sit in the embassies over, overseas in over 80 countries I believe, I think it is at the moment. Their job is to help introduce U.S. companies to foreign purchasers around the globe of that specific product or service. So their matchmaking service is, is just unparalleled. The Gold Key Service, they call it. Um, it's a vetting process of the foreign potential customer, as well as they provide a lesson local customs of doing business in that country, 'cause it's not always the same as, as how we od business here. So they help folks understand that.
They'll even help with translation services for the meetings that, that first occur during those introductions. They assist with the in-country visits, if U.S. companies would like to go visit those potential customers in person, we've seen a great success with companies getting to know their customers in person. Um, this is only one of the services they provide. Their website's export.gov.
Jason Feifer: That’s a lot of really valuable resources, and it just makes me think about how complicated this subject is. When you guys start working with small businesses, how, how often do you find that they are actually ready [laughs]. And I don't even know how to define ready, but I'll, I'll leave you to define it for, for exporting. I mean, you know, just, just thinking about, for example, you mentioned a little while ago the amount of paperwork that's involved. And you've gotta be thinking about country-to-country specifics. This, it sounds like, "Well, boy, wouldn't it be great to grow my business by exporting?" But then you start to get into it and you think, "We got a lot to work on here." Ho-how prepared do you find that small businesses generally are, and maybe what are some of the first steps that they may wanna take to get themselves to ramp up to this opportunity?
Jennifer Krause: Yeah, you're absolutely right. Some folks do wanna jump into, or they... somebody's contact them through their website a lot of times, and they're, they like, "Hey, we wanna capitalize on this order." Um, luckily, a lot of times it's Canada or something a little bit easier to get going on but yeah, you're right. Some folks need to make sure they're, they, there's a section on some websites, the 'Are you export ready?' Whenever I see that, I think that's great, 'cause it kinda walks companies through at the, I believe the export.gov website does that. There's also export universities, is what they're referred to as, Export 101 classes. And we speak at a lot of those and helping companies understand what steps are coming towards them.
Uh, but u-upon striking up and negotiating a sale you know, a contract, a relationship with a foreign customer a-and if the company's established here in the U.S. and they're, and again, entering into the foreign markets, that company's already been in business. We know that they, they, they have a proven track record with their products, as far as the agency that, that I work at and Aerek works at. So, us at, here at the Export Import Bank know... we wanna make sure that all that hard work that went into that sale, that negotiation, i-is something that they can capitalize on. They don't lose getting paid on the, on the product and so really if they have established themselves in the U.S. market, they have a potential sale overseas, and we can see that they've done the due diligence of, of getting the proper steps in place to make that export happen with a freight forwarder can really help with a lot of the documentation. I, I suggest having a strong freight forwarder and reviewing maybe a couple folks about that, 'cause that, again, that paperwork that gets filed is important.
But if we can see that those things are in place, this isn't a startup business then we're usually willing to bring them into an entrance level product that we have called Express Insurance. And, and that's our main product here at EXIM that we're off- that we help U.S. companies with is, is a product that protects their invoices overseas. So they're going to go ahead, in a lot of cases, ship product overseas without having gotten paid first. And that's, that's nerve-racking and that'll keep you up at night. This insurance is offered by a dozen plus private carriers, as well as the government program through EXIM.
And if a company's ever bidding in competition overseas, they'll see that, that other, you know, say, German suppliers or Chinese suppliers are very strong in the terms they offer, and that's because there are over 116 other countries that have the same government program that we're offering. It's typically 90%, 95% protection of the invoice for l- for a cost that's less than 1% of the invoices, so you know, paying $163 to protect a $25,000 invoice overseas is far cheaper than flying to visit that customer or hiring an attorney no offense to our attorney friends.
Jason Feifer: They don't come cheap.
Jennifer Krause: [laughs] No, no, no. EXIM offers this protection in over 180 countries, so, so to me it's a no-brainer. If you're gonna go through all the trouble of getting ready to export it's worthwhile having a conversation with EXIM and seeing if you're a candidate to be offered the invoice protection so that you know you have that backstop.
Jason Feifer: Thanks, Jennifer. So you have laid out a million different directions in which this conversation could go, but I'm gonna take a more thematic turn for a moment, which is that something that we've been talking about here is accessibility of, of exporting and making sure that, that the, the broadest number possible of people have access to it. And so that feels like a good opportunity to bring Aerek into this conversation. So Aerek, you are an export finance manager at EXIM and I know, also, work on a program to make exporting more accessible to minority and women-owned businesses. So Aerek, I'd love for you to speak a little more about that program and where you see those opportunities.
Aerek Stephens: Thank you, Jason. Thanks, Adam. And great, great setup, Jennifer. I appreciate it. Once again, as Jennifer has talked about, is basically making sure the information's accessible and, and as you spoke just a minute ago, having the equity of access, the minority and women-owned division of EXIM Bank has been around since 1997. We’re there to help minority, women-owned, veteran-owned disability-owned companies, making sure they get the information they need to be successful from start up, as we talk about it from entrepreneurial stage. What we can do is if you're not ready, then let's get you in contact with the people from a state perspective that can get you ready.
One of the things that you're gonna be looking at when you start to export is an export credit list, export credit plan, or an export plan, so to speak. I also work with the Regional Export Promotion program with EXIM Bank. That's a 30-year program, which basically works with the state and local agencies to make sure we're in tune what's going on with that particular community. Each of our states are different in terms of the way they actually approach exporting. Each state has maybe a different level of assistance for s- for the entrepreneurs or even new exporters. Uh, some, some states do a fantastic job of laying everything they can out to make sure they can help. And one of the biggest, und-underutilized resources as Jennifer talked about with SBA is the STEP Program. Uh, it's a program which basically helps each particular individual within that program get ready to export, helps them actually have an opportunity to do things such as rebuild your website so it's more user friendly from from outside the boarders of the United States.
Now, our goal from a MWB standpoint, minority and women-owned business, we kinda refer to ourselves in that particu-partic-particular moniker, is to do not only webinars but also informational sessions, where we sit down and really guide the actual individuals how they can export. Uh, one figure I was reading about the other day, which kinda blew me away, during our COVID-19 crisis, almost 7 million Americans started new businesses. Now, that's an incredible number when you think everything we were going through that particular time. But being able to actually grow your business through exports is a great way to make sure when things are happening, such as, as for the last 18 months, you're somewhat diversified and you're not having al your eggs in one basket.
Jason Feifer: Uh, thanks, Aerek. Hey, are there specific challenges that it's worth addressing here that minority and women-owned businesses face with exporting. I-I'll think of... the, the one I can think of off the top of my head is that, of course i-i- the, one of the major problems for minority and women-owned businesses is that they tend to have less access to capital, and because it, you know, it, there's just, there, there are less investment dollars available for them, which is a terrible thing that the entire business community needs to be grappling with and, and it's starting to. But that is something that I imagine translates into challenges with exporting. Is that right?
Aerek Stephens: A-a-absolutely. I think all business across the board, especially minority and women-owned businesses, underserved businesses, shall I say do suffer from that. But one of the ways we can eliminate that or help mitigate that particular obstacle or challenge is utilizing export credit insurance. Uh, one of the benefits of export credit insurance is also being able to borrow against those funds. Uh, being that it's secured by an actual government institution such as EXIM, it gives you that ability to... the bank is more apt to loan funds based upon your ability to actually export using export credit insurance. Now, there's also funds there's crowd funding, there's factoring. There's a number of different ways you can actually, you know, obtain those funds. I'm not saying it's easy. I'll be honest, it's not, but you know, it's a worthwhile venture to be successful and grow.
Jason Feifer: Thanks, Aerek. We have Kat Cole, who just came into the room. Kat, a friend of the brand — advisor, investor and ex COO and president of Focus Brands.
Kat, what you are walking into here is that we just covered a lot of the challenges and opportunities, structurally speaking, that the Export Import Bank of the United States help entrepreneurs with and, and that they are often focusing on small businesses and have a particular focus on trying to help minority and women-owned businesses gain more access to the export market. You uh, were, as I just said, the COO and president of Focus Brands, which is a an owner of, though that is not a a name many people may know, they certainly know all the brands that that fit in there, including Carvel Ice Cream, Cinnabon and so on. And so I imagine that you saw, you know, a, a pretty complex operation there where exporting and importing played a role. I would love for you to just bring in a little perspective of, of maybe the challenges that you saw in that space, and the kinds of things that you think small business owners might wanna be aware of as they start to think about growing their business with international trade.
Kat Cole: Yeah our business was in... when I left, and I just left in January, was there for 10 years building the business around the world, we were in 70 countries, every major global market to varying degrees of, of maturation and saturation. Outside of North America was predominately the Gulf, you know, the Middle East, as well as Pacific Asia and then South and Central America. Those were the big, big areas of the world outside of North America that we were in and then sprinkled throughout the rest of the world.
And you know, there are, are two really big considerations for international trade and international expansion. One is, you know, importing and exporting the brand, like, the concept itself, and how does it translate and what are those implications on everything from labor, which might be affected by laws or local competitive set, as well as COGS, you know, cost of goods. It can be very different dynamics, extremely low or extremely high in different markets, certainly import-export regulatory elements in my business, which was food. You know, when you start talking about things like dairy, you'd better be prepared to not only work with local governments and the international trade groups to understand what the latest laws and rules are, but then also, leverage those groups to find the right relationships for what is often a requirement for local sourcing.
And an-and then you've gotta figure out, again in our case it's food, but it could be any physical product. How does that affect your current recipes, your current formulation, your current manufacturing your current on-site employment staffing models, because different ingredients or different requirements can mean... they can have different implications on the business. So the implications of what happens when you hop oceans or you do business with partners that then results in ocean-crossing, air-crossing. The implications are, are much deeper throughout the organization than many people appreciate. And so, you, if you're a small business, the good fortune we had is we were a franchise, or so the people we are supporting were in fact teeny tiny business owners in most cases. You know, they owned 1 to 10 units. They're doing $5 to $10 million a year in combined revenue. Now, that's different in international markets where they tend to be larger franchisees doing tens of millions or hundreds of millions in revenue. Uh, and even some cases, huge conglomerates where they're doing tens or hundreds of millions [inaudible 00:22:18] per year.
So certainly, the sophistication levels of the business owner varied. But using, you know, groups like this or other associations and institutions to be your partner and helping you anticipate what are, in most cases, predictable challenges, and then using their relationships to navigate those challenges and s- have a, a faster path to, typically, localized solutions or global creative solutions as a, you know, something small to mid-size business owners don't typically know to do. They just get stuck and then sometimes they get taken advantage of or pay more than they should for goods and services and partners around the world, because they don't know better. So finding partners, like this group and others is a key to not throwing money away and to having a faster path to international expansion and success.
Jason Feifer: Thanks, Kat. And I know you're tight on time, so I'll ask you one follow up and then, you know, I'd love if you could hang out, but I understand if you've gotta run. You talked a lot about partnerships there and I imagine that people in the room who might be thinking about this might say, "Okay, got it. Makes total sense. Need great partnerships, uh... now, what?" [laughs] Ho-how do you advise that s- entrepreneurs, small business owners go about figuring out who the right partnersh- partners are and, and where they can begin to build those relationships? Uh, you know, especially if we're thinking about overseas expansion you know, you're, you're dealing with just a whole, a, a completely different set of people and structures than you might be familiar with, and the idea of finding the right partner and figuring out that they are the right partner may seem pretty daunting by itself. What was your experience and do you have any advice on building great partnerships?
Kat Cole: Yeah, I mean, certainly it can be daunting, so like anything, you know, you look for others who have expertise in vetting or working with partners and organizations. So whether it's an international exchange, whether it's an association, like a supply chain association, a franchise association, or you're looking for some groups that have some type of proof of legitimacy, validation and even just background checking, right, reference checking. Who's worked with these folks, what's been their experience? It should not be difficult to find that through some googling or even asking those companies, you know, who's worked with you, who can I talk to? You wanna talk to at least, at a minimum, two people that have worked with these groups, and ideally two people, and I typically talk to, like, [laughs] you know, 5, 7, maybe even 10 if it's a high risk situation.
You're, you're just looking for inputs that help de-risk what is still going to be a risky proposition. So that's one is just the same diligence you would do on hiring an employee or bringing on an investor or a partner, you need to do on, on global partners for ins- import-export operations.
Then next is making sure you are partnered with a good global legal firm who understands that industry and how it evolves around the world. So franchising, for example, has very different laws around the world, and you need to understand, even if your business is incorporated in a particular country and is subject to the laws and rules of that country. Once you start doing business with people in other markets, different rules apply and so having a good, you know, business partner, either in-house attorney if you're large enough or external firm that can help you understand in business terms what the legal implications are of your, the type of contracts you would be signing, how solid are they, what does it give them the right to go do with either the formulations that you're providing or what you teach them, or the IP that they now have access to.
So you just really wanna understand that. You always think the best and hope for the best of any partnership, but it is incredibly important because you hear these stories of business owners with a lot of dreams having some tough things happen because they did not appreciate the complexities of the laws of the countries, or the businesses, that are based in other markets around the world and the different laws around sort of receiving and sending goods, or receiving and sending IP.
Jason Feifer: That was a really valuable and specific response, so I really appreciate you digging in there. Kat Cole, again, always wonderful having you in these rooms and there's a reason why Kat has 1.5 million followers. You should totally go and add yourself to that list because everything she says is just so instructive. And so, Kat, thanks again, always great having you in the room.
I want to now turn to Keith because, Keith, you also come from this perspective. You're coming from the business side of this and are experiencing the challenges, I'm sure, of exporting. You're the the VP of channel sales at EyeTech Digital Systems, so maybe you can pick up from some of the things that Kat shared about the, the challenges here and understanding the very varied terrain that you must enter as you're trying to export. So maybe step back and explain a little bit more about EyeTech Digital Systems and take us into your experience.
Keith Jackson: Yeah. Thanks, Jason, for the opportunity to join this. At EyeTech, we make a medical device, it's called eye-tracking technology, that allows individuals who are paralyzed to control the computer with their eyes. And we've been doing this for 25 years. Our founder actually invented it for his own personal use and, uh... Couple things that I would add on to what Kat said is for great success internationally — own your backyard, I would say. Because as you go a-across seas, across boarders, they're always looking at share with us your successes in the U.S. and why we should partner with you. It's not, you know, they basically flip it on back to you as well.
And we did the STEP program here in Arizona, which was very helpful to identify, you know, where we should focus our energies. And we identified Japan, India and China. And then we engaged with the U.S. Commercial Services team, which I highly recommend very good use of time and money. I mean, for a few hundred dollars, they can vet out certain companies that fit your criteria for distributing o-our products. We're in about 35 countries now, and it's really helped expand our focus of areas that we're not in. For example, we went to a conference in Japan after identifying and you know, talking with different companies. And then when we were there, there was great language translation support because U.S. Commercial Services has offices around the globe and the component of language translation is just huge, because we were finding in years past that just things were getting lost in translation with existing distributors not performing. And when you're looking at, you know, t- for our product, which is a medical device, lot of different regulations that we have to follow.
It's super important that you find the right distributor that's going to m- be able to meaningfully distribute your product and support it and we, we actually vetted out several companies and we found the right one and they're, they're doing great for us and we have a great partnership. Uh, we actually held off on China for the time being for s- th-there was a lot of good words of wisdom from the U.S. Commercial Services team on making sure we're not going in there too early, because there's a lot of IP challenges that we needed to be aware of. So that was really helpful. And, but yeah, those are some of my suggestions.
Jason Feifer: Thanks, Keith. I'll just do a quick reset here which is to tell people that my name is Jason Feifer, I'm the editor in chief of Entrepreneur Magazine, and we are having a conversation today about, as the title says, how to grow your business with international trade. And we're doing that with some experts from EXIM, the Im- the Export-Import Bank of the United States, and we also have Keith, who is is, is in the business of exporting and can speak to it from that side. And we wanna be touching upon all the things that you need to know to grow your business, we're gonna be focusing on international trends, advice for small businesses looking to export and more.
So if you have a question, please raise your hand. And actually, if you can, put your question briefly in your bio, that way Adam, who is who's running this room, you see him up there, i- uh, will be able to go through it and see if it's a fit and bring you up. So I appreciate that.
Keith, let me turn back to you for just a follow up. That was a very interesting point that you made earlier about how we... when you reach out to potential partners in other markets that, yeah, you, you might think that they're all ready to serve but in fact, a lot of them are gonna start grilling you on your U.S. business, which is which is interesting and perhaps something that people, if this is the first go round for them, may not be anticipating. And so I'm curious what kinds of things they're asking and maybe what pieces of advice you have for entrepreneurs about what they need to have at the ready, what kinds of things should they be preparing so that they can convince potential international partners that they are a good opportunity for them?
Keith Jackson: Yeah what they're asking for are white papers and current partners who are selling your product. We actually moved from a B2B model to a B2C model in the U.S. and recently, and... So just sharing examples and white papers putting them in touch, maybe doing a three-way call with existing partnerships that we have with, you know, major medical partners of ours just to solidify those are some of the things they're asking for. 'Cause again, they're, they're, they're putting a lot of time and effort into reselling your product, and so they wanna make sure it's the right fit for them as well. So the grass, we always feel is greener on the other side, but we do need to own our own, own backyard in order to attract the, the right type of distributors, you know, around the world.
Jason Feifer: Jennifer or Aerek, I'm curious what you see as some of the most overlooked things that entrepreneurs may not be considering in this space. You know, I'm just thinking about how, how i-it's possible that a lot of you know, entrepreneurs or, or, or, you know, folks at companies that are overseeing the exporting, may not have thought to put together white papers the way that the way that Keith just described. Wh-what are some things that you're seeing that maybe folks should start thinking about now to button themselves up for this experience?
Jennifer Krause: Yeah, I could comment on that and say that some of the seminars that I've sat through, like Export 101s and how to even increase your international presence, talk even in simple terms as, like, on your website, a lot of us put a U.S. area code and then our phone number, and if somebody international clicks that, they actually can't get through. So, like, adding a country code. It's like something as simple as that on your website, or a lot of us put, you know, Atlanta , Georgia'' and, like, know... people in other countries don't know where that is. You know, adding the words 'United States'. You know, so optimization of your website, to me, 'cause that's how a lot of people find, find you i-is definitely a good route to go.
You can also work through the wording on your website to come up in favorable order of a Google search, so we call it search engine optimization, SEO. So you might look at tips for, for optimal SEO to make sure your website comes up, if you're gonna put the effort in. And then you've heard Aerek, and I heard Keith mention, the STEP program and, you know, government loves acronyms, so I'll tell you what that stands for. It's State Trade Expansion Program and what that is, if you go to sba.gov, the Small Business Administrations websites, sba.gov and you just put 'STEP' in the search, you'll read more about this program. But as Keith mentioned, it's, it's a way for, you know, some for you to receive grant money. It's an application process, but it's, it's pretty painless. Through 48 states and U.S. territories that are falling in that program at the moment.
SBA has given money to the state programs and then the state, a lot of times, matches the money or also puts up a portion of the money to help companies expand internationally. So that could be translating your website into an additional language. So if there's a particular market that you really wanna get into that could be a way for you to receive some reimbursement, because I know it's expensive to update a website, especially if you're gonna add a whole nother language and translate everything. Translating your, your paperwork, your, your h- your fliers, your handouts, your brochures into other languages could also fall in there.
Each state has, you know, the areas that they focus on. Some are looking to get you into trade shows overseas so you can meet buyers in person, potential buyer in person, 'cause that goes a long way, sitting down at a table with a potential customer. And in fact Aerek and I received news this week, which is over the moon, we're super excited, we haven't even made our own announcement here yet. We're putting that out together is that the STEP program can now help reimburse for EXIM insurance premiums, so protecting those invoices once you've done all this hard work, the STEP program grant money, you could even apply for reimbursement of your insurance premium. So there, the, the STEP program, I highly recommend folks check out at sba.gov.
Aerek Stephens: Absolutely. That's great information, Jennifer. And if I could just add one thing, one of the things from an entrepreneurial standpoint the, the [inaudible 00:37:49] as well is making sure your financial documents are in order. In terms of have them done, you have a, you have an account, you have somebody who really understands how to put your documents together. Now, within that, we all understand that, you know, when you are a business for yourself, you have the ability to basically write off a number of different tax deductions. Now, a lot of times what ends up happening is your company doesn't seem as profitabiti-profitable as it really is because you're writing so much off and not taking out any actual salary or actual income.
So it's important if you're really looking to go forward and making sure you have your strong financial position when you're looking to actually, you know, look for export credit insurance, or even working capital not only us or SBA, or a bank that you have a strong financial position on your on your spreadsheet.
Jason Feifer: Thanks. Great information. And also, I love that we're breaking a little news here on this program here in Clubhouse, so thanks for sharing that. Let's turn in our final phase here on this conversation. Jennifer and Aerek, you had both brought up issues of financing and that's been a part of our conversation throughout, but I would love to just turn to it more specifically because I'm sure that there are a lot of financial concerns that go with exporting.
Um, so people who are ex- uh, considering exporting their product or service or entering a new market, they may be concerned with hot to finance the production or how to get paid by customers. Are there specifics solutions that you recommend as they start to explore this?
Jennifer Krause: Yeah, we talked a lot about this export credit insurance, which is protecting your invoicing. But as Aerek mentioned, there's a working capital program through the Small Business Administration, sba.gov and, and EXIM's own set of lenders too which i- w-we see a lot of times w- you know, an exporter's trying to fund their own export growth. And, and it's very normal for somebody to go to a bank, so nobody needs to feel bad about, "I-I, you know, I-I have to ask for some financial assistance, like, you know, I can't expand as fast as I want to and capitalize on all these orders that are potentially coming in without some help," and that's, it's extremely normal all, companies of all sizes.
So I highly recommend that you talk to your bank or go to sba.gov, or exim.gov, and look at the list of lenders. If your bank doesn't participate, you give them a call and they kinda don't know what you're talking about if you say 'working capital' assistance, you know, for export. Some banks just don't do it, but what that enables you to do is to leverage your your capital position and, and at, and receive a line of credit through the bank. So wh-what the SBA's doing, what EXIM is doing is giving the bank a 90% guarantee on the line of credit that they're extending you. So that makes the bank a lot more likely to extend you a line of credit, because they really only have 10% skin in the game.
So, this government guarantee backing that they have, I mean, it, it can be from the big name banks that you know, two super regional banks, two community banks even, that we have on the roster who are willing to do this for exporting clients. So the bank, it sends an application through to EXIM, or in some cases, some of the banks have been given their own pen and paper to and then just notify us that they have, or SBA, that they have agreed to a line of credit. So some of the banks are experienced enough to just approve it in-house.
Just to give you a realistic timeline, it does take a month or two know, paperwork-wise for them to get to know a company. And a lot of times, the deposit accounts for your company may be asked to, to be housed at the same bank. Uh, but it's a great way to take your own income, leverage the bank's income, make those sales happen, because it's really hard to be able to expand internationally and give 30 days, 60 days, wait to get paid from your customer before you can let another transaction happen internationally. Makes a lot more sense to, to use some of the bank's money to keep the transaction flow going and now have to wait for your international customers to pay you to do the next transaction.
So I highly recommend working capital guarantee programs. Again, through the SBA, EXIM, sometimes a bank's willing to do it without the government guarantee so that's also gonna be possible.
Jason Feifer: Thanks Jennifer. Aerek an-anything to add on that subject?
Aerek Stephens: One of the biggest things is make sure you utilize these resources. These government resources are available for you. These are your tax dollars at work. So you know, you take advantage of them. We've be- we've been around 87 years and, you know, Jennifer and I can both go into a room and people, "Who's EXIM Bank?" And they know we actually been around. You know, we're older than the SBA, we've been around since, you know, HUD and S- the SCC were started in, in, in the 1930s. So it's an organization where we're here to help and we want to make sure that every American, that every American has the opportunity utilize these resources that are out here.
Jason Feifer: Perfect. Well, look, this has been a really fascinating and tangible conversation. I really always appreciate tangibles because entrepreneurs, especially when they're tackling something as complicated as this, really need to know the specifics and the programs that can help and the ways to be thinking about this, and so I really appreciate all of that.
I'd like to close our time together by asking Keith, Aerek and Jennifer for a parting word of advice for someone in the room who is maybe thinking about growing their business with international trade. We have talked a lot about various things that people can do, and so possibly your parting piece of advice will contain something that we've already talked about as an interesting starting point. But I suppose if you were in an elevator with somebody, and they hit the thirtieth floor and said, "Tell me how to start inter- [laughs]... grow my business with international trade." What might be the thing that you fit into that time to share with them.
Keith, I'll go to you first. What piece of advice do you have?
Keith Jackson: Yeah, my advice would be to definitely reach out to the, your local STEP program, as well as the U.S., U.S. Commercial Services and get to know them, sit down with them. They usually have, like, a, a six-week course to kinda fine tune your focus on what areas outside the U.S. you'd like to focus on. And I would highly suggest going with areas where, perhaps, the STEP is not as big. For example, if you're not exporting to Canada, that's a great way, not a lot of additional language translation needs there. Uh, but, a-and, and a natural fit and extension and learn from that, and then build from that, going to Europe, going to Australia, and... but if the data looks really good to go to Japan or to go to other emerging markets then, then go for it. But take, a a stepped approach because the best thing that I've found is as you find the right distributors who can sell and support your product you really diversify your revenue stream and, you know, you're making money when you sleep at night, which is always a good thing. And you can, you know, get your product or service to, you know, reach more and more customers and, and help benefit our world, which is, which is a good feeling.
Jason Feifer: Fantastic. Aerek, we're gonna turn to you next.
Aerek Stephens: Thank you, I appreciate it. Well, you know, it's a great opportunity to speak with the enpt-entrepreneurs today. One thing I would say, as I said, make sure you know your resources within your state, whether it be your SBDCs, your local, your state economic development agencies, which focus on international trade and having conversations. And don't be afraid to ask a question. No questions a dumb question when it comes to exporting. You know, everybody's probably wondering the same thing, so be... communicate with all the representatives you can to make sure you have the co-correct information and all the information you can and collaborate.
Jason Feifer: Perfect. And Jennifer.
Jennifer Krause: That's some great points that Aerek had. I would say if you do talk to somebody that, y-y-you know, you give a call with question and they don't have the answer, ask them who they might know that could answer it. Because believe it or not, the export community is really small. A lot of us know each other and a lot of us know what each other do so that typically, we'll, we'll turn you in the right direction if we're not the right resource for you.
Jason Feifer: Awesome. Well, thank you so much and this is, I'm sure a valuable conversation for entrepreneurs inside and outside the U.S. because uh, Clubhouse is global and I imagine that we'd have folks from a lot of different backgrounds who've been listening to this today. Uh, so, I-I'm just gonna wrap up here. Again, my name is Jason Feifer. I'm the editor in chief of Entrepreneur Magazine and we have been really honored to partner with the Export-Import Bank of the United States on this session today on Clubhouse. So thanks to our panel of expert Jennifer Krause managing director at EXIM, Aerek Stephens, expert finance manager at EXIM, Keith Jackson VP of channel sales at EyeTech Digital Systems, and of course, though she's not here, we had Kat Cole, advisor, investor and ex-COO and president of Focus Brands here.
Uh, thanks to Adam Soccolich, who ran the show here and Deepa whose name you have seen up at the top, Deepa's on our team at Entrepreneur and helped make this happen, so we appreciate everybody. Thanks to all. If you have further questions, well, the experts here have given you many, many places to reach out. But of course do not forget the gigantic resource that the Export-Import Bank of the United States is, and what a great resource Entrepreneur Magazine is. How about that?
So thank you again everybody. This has been such a fantastic, tangible, interesting conversation on a subject that can really be transformative for businesses. I hope that everybody in the room had a good time and took a lot of notes and have a great day.
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