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EXPORT WASHINGTON ASSSISTANCE

EXPORT WASHINGTON ASSSISTANCE. Helping Small to Medium Sized Companies Achieve Global Export Success in Washington State . Have you considered exporting your Goods and or Services into Foreign Markets?.

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EXPORT WASHINGTON ASSSISTANCE

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  1. EXPORT WASHINGTON ASSSISTANCE Helping Small to Medium Sized Companies Achieve Global Export Success in Washington State

  2. Have you considered exporting your Goods and or Services into Foreign Markets? Washington State SBDC has Certified Global Business Professionals and Certified Business Advisorsthat will assist you in export business planning, market research, market entry and financing initiatives.

  3. Today’s Topics • Why Export? • Export Assistance • Exporting Road Map & Export Readiness • Export Plan Basics • Market Research & Market Selection • Common Market Entry Methods • Export Financing & Logistics

  4. 1. Why Export?

  5. Benefits of Exporting • Increase Sales in Foreign Markets • Find sales growth opportunities in foreign markets with more customers than U.S. Markets • Capture better profit margins when higher price points are available in foreign markets • Higher sales volumes can provide improved economies of scale leading to improved profits • Decrease Impact from Domestic Conditions • Avoid dependence on a limited domestic customer base • Foreign markets may provide outlet for unsold, excess or outdated inventory in slow or depressed domestic markets

  6. Lots of customers out there • 96% of the world’s consumers live outside the US • 66% of the world’s purchasing power is outside the US • 91% of Washington small businesses do not export Population Purchasing Power Washington

  7. Washington’s Major Export Markets Data Source: U. S. Census

  8. Washington Key Industry Sectors with Export Opportunities Manufacturing Technology Aerospace Value-Added Agriculture Health Sciences Industrial Controls Bio-Medical Professional Services Green Technologies

  9. National Export Initiative Federal program created to increase amount of American products and services sold outside the U. S. This Program Seeks To: • Improve advocacy for U.S. exporters • Remove trade barriers  • Enforce trade rules • Promote sound economic policies • Increase access to trade financing

  10. Washington State Exporting In 2010, 9% of WA State Businesses Exported (The National Average is 4 %) 5 Year Goal is to GROW EXPORTING TO 18% 9% 18% WA STATE 2015 WA STATE 2010 18% 9%

  11. Common Fears About Exporting I’m too small It’s too Risky It’stoo complicated I can’t afford it I can’t compete Export Myths

  12. 2. Export Assistance

  13. Export Readiness Center • Created in 2011 as result of the National Export Initiative • Part of the Washington SBDC • The SBDC provides services designed to help companies grow their business, achieve higher profits and improve operations. • Cooperative effort of Washington State University, other educational institutions, economic development organizations and the U.S. Small Business Administration.

  14. Our Goal: Help clients conduct successful business in foreign markets Domestic Markets Foreign Markets

  15. How We Do It Export Readiness Center assists Washington based small and mid-sized businesses that are new to exporting or looking to expand into new markets. • Export Advising • Foreign Market Research • Export Readiness Training • Service Provider Referrals

  16. Export Advising International Trade Specialist provide In-Depth, Confidential, No-Cost • Market Entry Strategies • Trade Finance • Export Compliance • Professional Resource Referrals • Export Readiness Assessment • Foreign Market Research • Market Selection • Export Plan Development

  17. Our Research and Training Foreign Market Research: • Performed by staff of university interns • Custom and targeted to client’s needs • No-cost Training: • Export workshops – Ready, Set, Export! • Low-cost • Includes Expert Advise from: Trade Specialists, Attorneys, Shippers, EXIM Bank, and Export Finance Assistance Center of Washington

  18. Professional Service Provider Referrals

  19. Collaborative Advising Approach to Exporting InternationalTrade Specialist Certified Business Advisor Research Interns EXPORT CLIENT Professional Service Providers State & Federal Export Resources

  20. Network Collaboration • Two Export Readiness Centers - Seattle and in Spokane. • International Trade Specialists collaborate and co-advise with SBDC Certified Business Advisors across the state.

  21. Washington SBDC and Export Readiness Center Locations WSBDC Export Center WSBDC ExportCenter

  22. Export Assistance Organizations Bureau of Industry and Security www.bis.doc.gov EXIM BANK www.exim.gov US Dept. of Commerce USEAC www.export.gov Federal Export Assistance State Export Assistance WA State Dept. of Commerce www.commerce.wa.gov WA State Export Finance Assistance Center www.efacw.org Local Export Assistance World Trade Center Tacoma www.wtcta.org WSBDC Export Readiness Center Int’l Trade Specialist – Spokane/Seattle export.wsbdc.org General Business Assistance INNOVATE WASHINGTON innovatewashington.org SBA www.sba.gov WSBDC Certified Business Advisors www.wsbdc.org

  23. 3. Exporting Road Map & Export Readiness

  24. The Path to Export Success

  25. “Must Have” to Export • Upper management commitment and buy-in to exporting • In-depth experience with the product or service • Adequate cash flow or financing capability • Production capacity and supply-chain capability to provide targeted export products or services

  26. “Nice-to-Have” • Exporting or international expertise • Foreign language ability • Cultural awareness and sensitivity • Travel to foreign markets

  27. Road Map to Successful Exporting Our Road Map approach is designed to help clients become successful and sustainable exporters EXPORT READY

  28. Are You Export Ready? How do you know if your business is ready to handle the Costs, Risks and Effort required to successfully export into Foreign Markets?

  29. Export Readiness Starts Here Clients need to become Export Ready in all FOUR critical Business Areas Have you successfully produced, marketed and sold products and/or services in the U.S.? Are you aware of demand in foreign markets? Have you received purchase inquiries from foreign buyers or identified international demand for your products and/or services? Do you have top management’s commitment to provide direction, financial support and critical resources to enter foreign markets? Do you have an Export Business Plan with secured financial resources that will fund your market entry and export activities?

  30. Evaluating Export Readiness Go to our website and do the online Export Readiness Assessment: https://export.wsbdc.org/survey R The Export Readiness Assessment is a tool designed to help you better understand your ability to begin or expand your exporting activities. The assessment covers the FOUR most critical areas of: Market, Product, Operations and Finance.  Trade Specialists may request that you take the Assessment prior to scheduling an initial advising session with them. This assessment is designed to give you and the Trade Specialist helpful information at the beginning of your advising relationship which can make a substantial difference in jump-starting the advisor's ability to add value from the first visit and moving forward.

  31. 4. Your Export Plan

  32. Next Step to Export Readiness Do you have an Export Business Plan that defines your market opportunity, return on investment and your capacity to deliver? Do you have research or data that confirms real foreign market demand with end-user pricing that will return acceptable profits? Have you selected reliable market entry methods that will minimize risks and support distribution and market growth opportunities? Have you established realistic and relevant performance metrics that helps evaluate your export business initiatives? Are you aware of current U.S. export requirements and do you have resources to establish a compliance program and procedures?

  33. Your Export Plan is Critical An Export Plan is not merely a document. It’s a TOOL to properly evaluate all the factors that would affect your company's ability to go international. It should define: • Your Company’s commitment to international trade • Reason for exporting • Potential export markets and customers • Methods of foreign market entry • Export pricing strategy • Exporting costs and projected revenues • Export financing alternatives • Legal requirements • Transportation methods • Overseas partnership or foreign investment capabilities

  34. Example Export Plan Outline • Company Profile II. Current Export Status III. Product Focus for Export Opportunity IV. Current Export Resources, Functions & Requirements V. Target Market Research & Country Profile VI. Market Entry Strategy VII. Market Development Action Plan (milestones/dates) VIII. First Year Export Budget and Financing Sources

  35. 5. Market Research and Market Selection

  36. Market Selection Involves Research Even if your business has international inquiries or has made recent sales of its product or services into foreign markets… Avoid “Reactive Market Selection” and Do Market Research to Analyze Market Fitand Minimize Risks

  37. Reactive Market Selection Mistakes Making sales based on unsolicited foreign purchase inquiries Following a competitor by making “copy-cat” sales to compete in new foreign market Unwittingly agreeing to a sale through middleman when your company can sale directly into a foreign market Committing money and resources to unqualified foreign distributors or agents Committing money and resources to poorly aligned foreign Partnerships

  38. The Benefits of Market Research Good market research improves your market entry by assisting you to: Develop target list of foreign markets to be screened Rank target market opportunities by multiple variables Select & prioritize markets by screened rankings Estimate market entry resources & associated costs Select viable market entry methods Estimate realistic timelines for ROI

  39. Available Research Sources In addition to U.S. Government data bases and internet research sources, the WSBDC Export Readiness Center is provided access to private international data bases through the SBDC and their Universities to seek out the information on behalf of the company.

  40. 6. Common Market Entry Methods

  41. Which Market Entry Method? • Indirect Exporting > Export Management Companies (EMC) > Trading Companies 2. Direct Exporting > Direct Sales in Country Through Representatives or Distributors 3. Contractual Market Agreements > Licensing > Franchising 4. Foreign Production (Equity Strategy) > Strategic Alliance > Joint Ventures (JV) > Wholly Owned Foreign Entity (WOFE)

  42. Risk versus Reward Market Entry Modes DIRECT INVESTMENT JOINT VENTURE DIRECT Exporting INDIRECT Exporting FRANCHISE LICENSING Low Investment Lower Risk Lower Control High Investment Higher Risk Higher Control Amount of Investment, Risk, Control & Profit Potential

  43. Foreign Market Entry Resources • To improve Market Entry strategy: • Download and read export.gov Country Commercial Guides for your target market. • Attend product relevant trade shows in U.S. or abroad. • Involve an experienced bank with international services that meet your needs. • Use Int’l Attorneys or Accountants - finalize distributor or licensing agreements. • Establish reliable and agreed upon payment terms with foreign buyers. • Attend export business and export compliance training programs (BIS).

  44. Foreign Market Entry Resources • Use resources to find and qualify potential buyers, distributors and/or partners: • KOMPASS Database - search for existing Representatives or Distributors • Foreign Commercial Services - find & screen potential players • Vendor Questionnaire & Profile Assessment tools - evaluate players

  45. 7. Export Financing and Logistics

  46. Resources for Small Business Exporters Export-Finance Counseling • Export Finance Assistance Center of Washington www.efacw.org Government Export Finance Programs • Small Business Administration (SBA) http://app1.sba.gov/training/sbaexporting • Ex-Im Bank of the U.S. www.exim.gov/smallbusiness

  47. Export Finance Counseling Export Finance Assistance Center of WA (EFACW) Provides export-finance counseling to current and prospective exporters based in Washington State. • Export-finance matchmaking by referring SME companies to banks, other lenders, and insurance brokers to support their foreign transactions. • Helps clients identify prospective overseas buyers and assess their creditworthiness.

  48. Government Export Finance Programs U.S. Small Business Administration (SBA) • Export Express Loan Program • International Trade Loan Program • Export Working Capital Program

  49. Government Export Finance Programs Ex-Im Bank of the U.S. - Products Support Pre-Export Financing • Working Capital Guarantees Post-Export Financing • CREDIT INSURANCE • Guarantees • Direct Loans

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