Your company is successful. You have a good, proven product. And now you want to share it with the World. There’s a strong case to be made for taking your business global. Just ask Jill McLaughlin, Trade Program Manager at the Florida Small Business Development Center at UCF International. She makes a great case for considering international opportunities. “When you consider that 95 percent of the world’s customers are located beyond U.S. borders, you can’t help but appreciate that there is a huge opportunity for growth.” Your competitors are going international, why aren’t you? she asks. “If your company is not exporting, you are literally missing the boat.”
Florida’s strategic geographic positioning and abundance of resources make it a prime location for international trade. Research shows that 96% of Florida’s exporters are small to medium-sized businesses, and statistics say that businesses expanding internationally grow an average of 15% faster and are 12% more profitable. So what’s your next step?
Build an Export Strategy
Once you have decided to start exporting, develop an export plan based on market research and internal assessments. McLaughlin noted that many companies that start exporting do so haphazardly rather than with a well thought-out plan.
Expert free and low cost assistance is available through the Florida SBDC’s International Trade Services, the Florida SBDC and Enterprise Florida. According to McLaughlin, “Most companies that export are better positioned to ride out the fluctuations in the US economy, experience faster growth and are more profitable. Exporting is not just for big business. “Get your passport renewed and come see us at the Florida SBDC,” she said. “We are here to help!”
From Seasonal to Year Round
When James Gibson and his group founded Adsil, a coatings company, in 1998, their market was the HVAC industry, where their corrosion preventive material could extend the life of air conditioners and also make them more efficient. Gibson, now retired, is a volunteer mentor for SCORE, Service Corps of Retired Executives.
Although successful, sales for Adsil, headquartered in Daytona Beach, were seasonal. “We needed to get into an area that had summer when we had winter. Our goal was to take the business global to supplement lost winter sales. The vision was South America and SE Asia, with the former via a Global distributor of HVAC units, the latter to establish local distribution.
A major air-conditioning company, already working with Adsil, opened doors in South America, the Caribbean, China and Vietnam. “Now we were exporting half of the year.”
Going global wasn’t simple. The product had to be registered in each country, meet strict shipping standards because it contains alcohol, and have Chemtrac, a company that handles shipments of hazardous materials, on alert if needed. Attorneys worldwide were engaged, as was the World Trade Organization to monitor and protect Adsil’s MicroGuard trademark. Packaging, labeling, instructions in a number of languages, plus training were all part of going global.
Manufacturing and shipping are handled through a paint manufacturer in Indiana, but management is from Daytona Beach. “Every month we have about 10 people who come to Daytona Beach for training.” Product uses and lines have expanded at Adsil, and now China, Vietnam and South American markets make up about 40% of sales. While you might think that sales are the first consideration, Gibson says otherwise. “You need to have a market. Before we went crazy, we worked with an A/C company, doing the research. Who would use our product? Who wouldn’t?” To raise money you need facts. “You can always think your ideas are great,” he said, but research may show that, “Nah, it is not gonna work.”
Other factors to consider when going global: exchange rates, tariffs, registrations, warranties, contracts, patent protection, marketing and even bribes at ports of entry. But first, said Gibson, set up a spreadsheet, estimating two years of potential sales, all the expenses. “There are tools, a number of templates, a lot of ratios you have to know.”
Look to Others For Advice
“Many Volusia County manufacturers are players in the global market, “ said Jayne Fifer, President/CEO, Volusia Manufacturers Association (VMA). “They are exporting their products around the world and importing parts to expand their product lines.” More are entering this market and look to their fellow manufacturers to learn the pitfalls of international trading, she said. “For example, Greg McNair, President, Beach Mobility Manufacturing, maker of beach and street wheelchairs, recently met with Bret Schmitz, president, of neighboring Hudson Technologies, which is an active importer and exporter, to determine if it was a good idea to import parts he needs to expand his product line.”
Ormond Beach & Worldwide
One of the most unique area businesses is GermFree in Ormond Beach, which designs, engineers and manufacturers lab equipment, hospital pharmacy equipment and turnkey mobile and modular cleanroom buildings. Its systems have been purchased by more than 6,000 institutions and companies in the U.S. and in 60 other countries worldwide. Bio-pharmaceuticals are also playing a growing role in the company.
Overseeing all this is Kevin Kyle, president. “GermFree has been an international company for the past 30 years,” he said. “International business has been a huge part of our success.” The company doesn’t rely on a single market, but instead performs work wherever it is needed. “We are on every continent except Antarctica, and we are looking for a way there.” Being international is complicated, he said. “Logistics and compliance matter. You have to have your registrations in place, as we do, to allow export of the facilities we build. There are a lot of things to consider.”
Sales and service drive the business. “You cannot underestimate the value of a sales and service team. Our teams are traveling all the time, across the country and the world, making sure the equipment is functioning according to factory specs. An internal sales team is responsible for various markets and geographical areas, while resident reps who speak English and the local languages, serve in foreign countries.
The GermFree factory is in Ormond Beach, where there is also an internal shipping and logistics department. Training is also there. “Last week we had five people in from Taiwan. Next week people will be in from the EU and then people from Ireland.”
Markets are key. ”At Germfree we have an annual strategic review, which includes a deep dive into assessment of all markets. That guides us in where we should put our efforts. In marketing and other areas, you have to start from data. If not, you are just throwing darts at the board.
“Right now we are working on expanding in Europe in the pharmaceutics segments, targeting all the EU, with an entry point through the Republic of Ireland. Enterprise Florida helped us a lot with advertising and grant work and getting our international footprint.” The Chambers and VMA helped create connections.
“Operating in foreign lands is not easy, but a lot of the local connections have enabled that. At the end of the day, all business is about personal connections.”
A Sunny Outlook
Two iconic area sun care brands, Hawaiian Tropic and Banana Boat, are also known worldwide. They are part of the Edgewell Personal Care company based in Chesterfield, Missouri, which has numerous consumer products under its corporate umbrella. Michschelle Romesberg is Edgewell Personal Care’s Sr. Global Program Manager.
“You cannot assume, that made in the U.S. means that you can export a product for sale in another country,” she said. Banana boat and Hawaiian Tropic are mostly made in Ormond Beach for the global market, but ingredients, language and labeling criteria vary by country and region. “There are many different requirements around the globe for what people put on their skin. Canada is different from the US. It is amazing.” Some ingredients may be considered safe in one country but not in another. “If you are in Spain, it is quite different than if you are in the UK. Even China and Hong Kong are different from each other.”
Edgewell has a regulatory team that monitors requirements and changes around the world. “You need approval from the country to import it, so that is a process, too. You get into the conversation about what is allowed, what can be on the label, what claims you make.”
The main thing, she said, is to know the rules of each individual country. They are not the same. If the documentation isn’t right, the product will get stuck in customs. And then what are you going to do? “When I work with project teams around the world, there are language barriers, vocabulary nuances that can trip you up. Do people understand what you are saying? Do you understand what they are saying?” You have to be very careful of contracts, payment terms, technical documents, not in your language, she cautioned. Because details matter, even knowing, for instance, that Golden Week in Japan lasts for 10 days, and nothing gets shipped out. But is it worth it? The consensus is – Yes.
Should Your Company Go Global?
Questions to Ask Yourself:
Jill McLaughlin, Florida SBDC at UCF’s International Trade program manager, recommends that you evaluate your company to determine if it is export ready:
Is management committed to this strategy? An international sales strategy is long-term, so management should be willing and able to dedicate time and resources to export activities.
Has your product or service been proven to be successful? Proven success in the U.S. can be a good indicator of potential success in international markets.
Do you have financial resources to support this expansion strategy? Funding will be required to support new marketing initiatives and business expansion.
Do you have capacity to fulfill the demands of this new market? Production needs, if any, need to be identified to fulfill demand that will be created by this new market.
For more information, contact Jill McLaughlin, FSBDC at UCF International Trade Program. Email: Jill.McLaughlin@ucf.edu or call 407-420-4856.