By DYAN MACHAN
She may not know it>, but Kentucky farmer Lanette Freitag, 63, is leading a pack made up not of the alpacas, sheep and llamas she keeps outside Lexington, Ky., but of the small American businesses that are boosting their sales abroad. In the first 11 months of 2010, U.S. businesses increased their exports by 17 percent over the prior year, to $1.7 trillion. Export giants like GE and Caterpillar account for most of the dollar volume, but 97.5 percent of U.S. exporters are companies with fewer than 500 employees, according to the U.S. Commerce Department. "Clearly, small businesses are a large part of the action," notes Suresh Kumar, the department's assistant secretary for trade promotion.
That's the kind of news the government is eager to trumpet. Last year the White House launched an initiative to double the amount of U.S. exports by 2015, and the Commerce Department is making a big push to help small businesses overcome the hurdles they face when they send their stuff abroad. Kumar says the department assisted 16,000 small and medium enterprises in fiscal 2010.
Freitag, who started a company called Feltloom that now ships goods halfway across the globe, ascribes her success to different sources: "This has been divinely driven," she concludes. The rise of the Internet and inexpensive travel has probably helped too. In any case, with small exporters standing out as one of the economy's few bright spots, it's worth examining what they're doing right.
Freitag originally wanted to make hats and scarves from the fleece her animals produced, but when she shopped for a loom, the only ones she could find that fit her needs were factory-size models. So she and her husband designed a table-size loom themselves, with help from a grant from a Kentucky program aimed at encouraging farmers to diversify. Among her first foreign customers were similarly frustrated farmers and artisans. She met a crowd of New Zealand farmers at a 2009 alpaca-breeder event in Cleveland, where she showed a clip from a DVD she made about her machine, which she sells for $7,000 and up. And a website she created to advertise the looms drew folks from Australia, South Africa, Peru, India, Canada and Europe.
Unnerved by the idea of selling overseas, Freitag contacted the Louisville office of the Commerce Department. It sent a representative to help Feltloom fill out exporting forms and figure out which countries had special shipping needs (New Zealand, for example, requires that wooden crates be made of special, treated lumber). Freitag's husband oversaw changes to the wiring to adapt it to different countries' electrical systems. And when she started to have anxiety about not getting paid, the government helped her ascertain that her buyers were good credit risks. Her future looms large: "I think our looms will be in every major city and university," Freitag enthuses.
Arnon Rosan, an owner of Signature Fencing & Flooring, was never shy about exporting perhaps because his company is based in multicultural New York City, he says. In Signature's early days, Rosan tapped the relevant industry associations to find international contacts; he'd even make random sales calls to drum up business when he was vacationing overseas. Still, he found a monumental challenge in trying to sell in Japan a huge potential market that he couldn't seem to crack despite seven years of effort.
Last year Rosan learned about the government's Gold Key service, a kind of matchmaking program for setting Americans up with foreign distributors. The Commerce Department also helped him translate his sales brochure into Japanese. Rosan had never thought to do so before, because his contacts spoke English. But he realized that clients had more comfort when they could read about a new product in their native language. Rosan landed a $300,000 account in Japan last year. Now, he says, Commerce is helping him with sales to Chile and Trinidad. "The government isn't selling the product for you," says Rosan, "but it's a good first step."
Of course, plenty of entrepreneurs have successfully gone abroad without the same degree of government help. Fash Asvadi, of PizzaOvens.com, says he's exported new and refurbished pizza ovens and equipment to all but a handful of the world's 195 countries. He is even selling in China, the focus of much of the U. S. government's hand-wringing over trade barriers. Asvadi said the Commerce Department was invaluable in helping him understand rules and regulations, but more important than the help was the business epiphany he had: He needed to put as much information online as possible. Prior to starting his oven business, Asvadi owned pizza stores in Georgia, Kentucky and Montana, and he noticed how hard it was to get information about buying ovens. On his own, he started uploading all the information he could get about ovens to his company's website. Oven buyers followed. Asvadi took a commission for listing used ovens for sale, and over time, manufacturers started allowing him to sell their equipment which he says he sold at a substantial discount to what other distributors charged. He recently added some Spanish-language pages to his site and now sells 35 percent of his equipment outside the U.S. "You have to think outside the box," Asvadi says with a smile.