Amir Safakish wanted to move his company into Mexico but wasn't sure how he'd find a reputable distributor. As president of ETA-USA, a $3 million-a-year power supply manufacturer, Safakish didn't see how he'd be able to size up potential partners on his own, especially since he didn't know his way around Mexico and he didn't know the language.
Help arrived when a worker in ETA-USA's marketing department referred Safakish to Commercial Service, a part of the U.S. Department of Commerce. "They helped us get into the market with a level of safety and the assurance of someone who had studied the market," Safakish said. The Silicon Valley Commercial Service office screened potential partners and set up meetings in Mexico in 2003. A Commercial Service officer accompanied Safakish on his trip. The agency even provided a translator.
"We would not have gone into the market otherwise," Safakish said of Commercial Service's assistance. The experience was so satisfying that ETA-USA is now looking to expand into South America, Moscow and Eastern Europe. "These are areas we would not go into on our own," he said.
Small and medium-size companies slowed by uncertainty may find it hard to move into international markets, but many organizations are ready to help. Industry groups, trade associations, foreign development offices and numerous U.S. government agencies offer a range of services, from guidance to financial assistance.
The mission of the Commercial Service, the agency that worked with ETA-USA, is to help small and midsize U.S. businesses expand internationally. "Our job is to assist U.S. exporters breaking into overseas markets," said Mari Felton, international trade specialist with Commercial Service in San Jose, Calif. "We tend to work more with small and medium-size businesses because they generally don't have their own resources available."
With little or no marketing budget, the Commercial Service and other government resources are hiding in plain sight. "We have about 1,400 people on staff worldwide, and we're very good at what we do," Felton said.
The Foreign Commercial Service has more than 150 offices in the United States and operates in some 80 countries overseas. Its services include researching prospective markets, making connections with distributors or resellers, and checking up on prospective partners. "If you're just getting started as a fairly new company or are already established, there are a lot of government resources available to help," said Boston-based John Joyce, regional manager of international trade programs with the U.S. Export Assistance Center, a part of the U.S. Small Business Administration.
For companies that aren't hooked in, government-based resources go largely untapped. "A lot of companies aren't taking advantage of services they could be utilizing," Joyce said.
Like FCS, the SBA helps a company take its first international steps. If an electronics company wants to sell its product in China, for example, the company could approach its local SBA office there's at least one district office in each state which can conduct market research to determine if the market is appropriate. The office would liaise with an office in Beijing that's part of the same organization "to locate distributors or get hooked up with the right trade show," Joyce said. "They know the regulations you have to comply with. It's very, very valuable."
The SBA helps fledgling companies obtain financing, too, by guaranteeing a loan that a bank may not otherwise provide. With the SBA-backed loan, "the company develops a stronger balance sheet and may move on and have a more traditional line of credit in the future without the SBA," Joyce said.
Foreign markets may be scary, but they present a big opportunity for smaller companies. China is a case in point. More than 80 percent of the American companies exporting to China are small and medium-size enterprises, said Craig Allen, foreign commercial officer with the U.S. embassy in Beijing. "In nearly all categories of our exports, we're seeing double-digit growth for the last several years, and we expect that to continue for the next several years. That is not to say this is without risk or without problems."