Three Tips for Using an Export Management Company

April 26, 2012
Tapping into the vast global marketplace sounds great in theory, but if you are like many small business owners, the logistics of making your exporting dreams a reality can be overwhelming. That’s when it makes sense to consider using an export management company for your first foray into international trade.

Yes, direct exporting—where you handle every aspect of the process—does provide the best opportunity to grow your sales and your profits. But the significant commitment in managing everything from learning cross-border distribution to establishing in-country business partnerships or joint ventures often isn’t worth the effort.

With an export management company (EMC) at your side, you can tap into international growth while maintaining your domestic business (and your sanity). The secret lies within developing an indirect exporting strategy using an EMC.

An EMC acts as your export department. What’s more, an EMC functions as a branch sales office or domestic wholesaler—they make money by selling your products. While an EMC might represent products that are complementary to yours, they do not represent competing products.

With thousands of EMCs to choose from, it’s important to find the one that is the best fit for your business. Here are some tips to help you narrow down the potential candidates.

1. Ensure the EMC knows your industry and target market. The vast majority of EMCs specialize by products, by foreign markets or by both. Because exporting, like all other sales, requires solid relationships with customers, select an EMC that has a track record for your type of product in the markets you want to reach. 

2. Negotiate reasonable financial arrangements. Financial arrangements between EMCs and their suppliers vary widely. But most EMCs do not take title to your property. Unfortunately, the risk of loss falls on yours and the EMC’s shoulders.

Like many outsourced sales operations, EMCs often work on a commission. To make it worth your while, the commission should be equal to, or better, than what you pay to your best domestic sales reps. And don’t forget to negotiate how costs will be handled for special services or events, such as participation in a trade show or an extensive advertising campaign. Like domestic sales efforts, you’ll see better results with marketing support.

3. Agree upon acceptable working arrangements. A major disadvantage of using an EMC is the loss of control over your brand and marketing. For this reason, the working arrangements should be vetted as carefully as the financial arrangements are. You’ll want to make sure the arrangement provides for regular, on-going communication, such as monthly reports on activities and successes. You may also want to retain the ability to sign off on advertising campaigns or other big-ticket marketing events.
If you’re interested in locating an EMC to jumpstart your exporting efforts, try visiting the Federation of International Trade Associations. In addition, check out this listof sources for exporting information as well as some options for export financing.

About Business Owner’s Toolkit
With an emphasis on problem-solving dating back to 1995, Business Owner’s Toolkit™ (www.toolkit.com) offers more than 5,000 pages of free cost-cutting tips, step-by-step checklists, real-life case studies, startup advice, and business templates to small business owners and entrepreneurs. The site also offers a monthly newsletter, up-to-date news topics, and Ask Alice!, a column that closely follows industry trends and provides trusted advice to inquiring site visitors. 

To Factor or Not to Factor

April 25, 2012

If you’ve heard about invoice factoring and are considering it for your B to B company, be sure it fits your needs.  Factoring is a type of specialty lending that’s not meant to replace bank lines or other commercial loans, but to augment them when the need for cash flow is greater than a basic line of credit can provide.  Factoring is helpful for young, non-bankable companies with growth opportunities, and for companies that can benefit by outsourcing their credit and collections activity.  Full-service factoring companies will provide finance, credit services and guarantees, and accounts receivable management.

Here are the Top 10 reasons to consider and NOT to consider factoring for your business:
TOP 10 REASONS TO CONSIDER A FACTORING COMPANY (OR NOT)
10.  Your B2B company needs a line of credit to support growth, but isn’t bankable yet.
9.  Your customers demand credit but your suppliers demand cash.
8.       Your customers love to keep you guessing.
7.      You just don’t have time to manage receivables.
6.      Your growth is outstripping your cash flow.
5.      Your customers worry when you make those desperate calls for payment.
4.      You worry every time you extend credit to a new customer.
3.      You’re passing up new business waiting for old bills to be paid.
2.      Your bank is getting out of the commercial finance business.
1.      You love the thought of outsourcing credit, collection and A/R management so you can concentrate on growing your business.
Or NOT:
 10. Your company is growing, but your gross margin is under 10%.
 9. Your cash is shrinking because your business is shrinking.
 8. Bad management is eating up all your cash flow.
 7. You want to replace your bank line and get a lower interest rate.
 6. You want cheap money.
 5. You’re tired of using the IRS to finance your business.
 4. You want to sell some old, uncollectable receivables.
 3. You’re looking for a collection agency to strong-arm your delinquent customers.
 2. You need some quick cash to pay off your angry suppliers.
 1. You need some quick cash so you can close your business and leave town.
Tom Smith is Vice President, Marketing for Riviera Finance, a nationwide commercial finance company and sponsor of the ASBDC.  Prior to Riviera, he worked as an independent financial consultant and held various positions in finance and marketing for Xerox Corporation.  He is married with two sons, and resides in the Tampa Bay area.  Tom holds an MBA in Finance from The Wharton School, University of Pennsylvania.
With offices nationwide, Riviera Finance (www.rivierafinance.com) provides early-stage accounts receivable financing to small companies in need of cash flow. Riviera’s non-recourse factoring program includes full protection against bad debt, and complete receivables management services. Since 1969, Riviera Finance has funded over 20,000 small companies.

Four Steps for Getting Your Marketing Message on YouTube

April 23, 2012

Many small business owners hope their YouTube videos will be the next viral sensations. Even if your video doesn’t achieve such great heights, YouTube remains a great low-cost way to publicize your business and increase your brand awareness. We’ve identified four steps that can help you achieve YouTube success.
1. Don’t deviate from your tried-and-true marketing messaging. Unless your video is the debut piece of a brand new marketing campaign, stick to marketing that works. That doesn’t mean you can’t experiment with humor, a story, or another device to show your business in a new light. But you should reinforce how your business solves customers’ key pain points with language they’ll encounter in your other marketing materials.
Fair warning: Tastes in humor vary. What you consider funny may be boring or offensive to others. When dabbling in comedy, make sure the script reflects a funny situation rather than relying on esoteric cultural references or irony for laughs. The latter two have a tendency to go over many viewers’ heads.
2. Know your limitations with technology.  If you’re comfortable behind the camera, go for it. But if you’ve never even held a camcorder and aren’t tech savvy (or you plan to star in your video), leave the filming and editing to someone else. If you’d like your video to have a little pizzazz, check out local video production firms, many of which offer very reasonable rates.
Getting in contact with your local college’s film students or the high school’s AV club could cost less with a negligible sacrifice in production quality.
 3. Create a YouTube channel for your company or the campaign. YouTube isn’t just about the video. By following these instructions for creatinga YouTube channel and  uploading a YouTube video, you can include your Website address, branding and contact info where your videos reside.
If you plan to create a series of videos, or your videos are part of a specific marketing campaign, create a channel for the campaign. For one or two videos that are more associated with your business than a specific campaign, create a channel for your company.
4. Promote your video via social media. Considering 48 hours’ worth of video is uploaded to YouTube every minute, odds are your video will get lost in the shuffle. Posting the link on your personal and business Facebook, Twitter, LinkedIn and other social networking sites is a good start, but go a step further.
Spend a little time sharing your video link with local media, thought leaders, and anyone related to your field or relevant to the campaign (if, for example, your campaign involves racecars, send a tweet to Jeff Gordon). Their retweet could result in hundreds or thousands of views.
You may not notice an immediate bump in sales, website hits or whichever metric you use to gauge success. Yet the small investment and cumulative marketing effect can lead to larger rewards. 

About Business Owner’s Toolkit
With an emphasis on problem-solving dating back to 1995, Business Owner’s Toolkit™ (www.toolkit.com) offers more than 5,000 pages of free cost-cutting tips, step-by-step checklists, real-life case studies, startup advice, and business templates to small business owners and entrepreneurs. The site also offers a monthly newsletter, up-to-date news topics, and Ask Alice!, a column that closely follows industry trends and provides trusted advice to inquiring site visitors.

How and Why to Support Young Entrepreneurs

April 20, 2012

Young Entrepreneurs are more important than ever, and it is vital for current entrepreneurs to support this next generation of business leaders.

Regardless of background, ideology or industry – most people in the world agree that entrepreneurial innovation positively impacts society and the world. Future leaders and entrepreneurs grow up in a world where technology and information change more quickly than ever. Information learned in school can be obsolete by the time students graduate. This is why young entrepreneurs need the support of the people that understand how a swiftly changing environment impacts the business community and how that relates to the role of an entrepreneur.

Current entrepreneurs and small business owners should invest in supporting and training up-and-coming entrepreneurs to ensure the most vibrant workforce possible for all entrepreneurial endeavors. It benefits everyone to encourage and train students interested in starting businesses, and the network of SBDC’s is an example of how small business support can make a difference.

Here are the top ten ways for small business owners to commit time to supporting the cause of “The Next Generation of Entrepreneurs”. The best part about this list is the fact that these practices also benefit the business owner.

1. Volunteer to speak at local high schools and colleges about entrepreneurship.

2. Volunteer to be a judge at DECA, FBLA, NFTE and other youth leadership competitions.

3. Host and mentor an intern at your company.

4. Contact local schools and offer to have one of your current business challenges used as a case study for a class. Then interact with the class when they present their recommendations.

5. Recommend the resources at the local Small Business Development Center so that young entrepreneurs know the programs that are available. The SBDC resources are available to anyone – even if they are under 18 as long as they have a parent’s written consent.

6. Make introductions for young entrepreneurs to create connections and open doors to resources that may not be possible at their age.

7. Find ways to partner with promising young entrepreneurs by evaluating their business plans with an eye for collaboration.

8. Take a young entrepreneur with you to an industry or networking event and introduce them to everyone you know.

9. Find a way to offer small business projects to young entrepreneurs that could lead to bigger opportunities.

10. Find a young business leader and make a commitment to meet with them on a regular basis to mentor and encourage them. Give them book suggestions, recommend continuing education opportunities and relevant industry events.

2012 has been called the “Year of the Entrepreneur” by many. I think that the next decade will be the “Age of the Young Entrepreneur”.

Amy P. Kelly is an entrepreneur that specializes in ways that businesses can support causes that improve communities and lives. She is Vice President ofClearPath where her team helps entrepreneurs achieve their goals. Amy started her first business at nine selling hair barrettes and is currently working on several new ventures while leading The Lemonhead Movementwww.lemonheadsrule.com. Some of her projects include: BodyRejoice, The MomVest, Strategies for Life and YipDeals www.yipdeals.com. Amy has a particular affinity for youth entrepreneurship and is a wife and mother of four. Contact her at amypkelly@live.com.