William Goodlin will be the first to tell you taking your product or service overseas can prove difficult at best.
He should know. As the long-time president of Bricmont Enterprises, a local engineering firm that designs furnaces for the steel, glass and brick industries, he has taken 12 trips to China in the past two years, 10 days each trip. And he still doesn’t have any contracts there.
But he wouldn’t have it any other way.
Goodlin knows that exporting takes patience, not to mention persistence and some level of fortitude. And the result? Since Bricmont, a Southpointe, Washington County-based firm that employs about 100 people, started targeting overseas projects in 1992, it has increased its annual revenue to more than $50 million. Today, 37 percent of its revenue comes from export sales.
So why aren’t more Pittsburgh-area companies doing it? Wayne DiBartola, a senior technical consultant working with the World Trade Center Pittsburgh, puts it simply: “Business in the U.S. is too good, so they’re reluctant to go international. But I would think twice about that because the future is in the global markets.”
For those willing to try, he offers this advice: “Persistence, persistence, persistence, persistence. And patience, patience, patience, patience.”
Both he and Goodlin, along with World Trade Center director Mame Bradley, are on a mission to increase export activity in the region. They recently took their message to a gathering of CEOs at a CEO Club program.
“We are way behind in terms of export employment,” Bradley told the audience, adding that only one job in 20 in the region is the result of export activity here, far behind the statistics of other metropolitan areas. “But for every billion dollars in exports, 15,000 jobs are created and supported. That’s one job for every $66,000.
“If we could catch up to the rest of the country, we could add 60,000 new jobs immediately,” she says. “The impact of $3 billion on local business is very direct and very powerful.”
The impact on a company’s bottom line isn’t so bad either, Goodlin says. Bricmont earns a profit margin of between 4 and 8 percent on domestic sales. But overseas, it can earn a margin in the neighborhood of 12 to 17 percent. That got Goodlin’s attention.
So where does a company begin? Goodlin offers a laundry list of advice, beginning with a willingness to work with the U.S. government.
“We avoided the government like the plague for 35 years,” he says, before finally realizing that it could help Bricmont immensely in breaking into new markets. Today, the company works actively with the U.S. Trade and Development Agency, the Export-Import Bank, the U.S. Department of Justice, U.S. embassies and the U.S. Department of Commerce in both Pittsburgh and Washington, D.C., among others.
Goodlin says he even relies on the government for cultural information, so that he’s aware of appropriate and inappropriate goodwill gestures and other behaviors before entering a market.
Time is the other significant barrier to entry, Goodlin stresses. As with his Chinese adventure, overseas relationships require a much longer-term view of things.
“When you get into the international market, they don’t know you from Adam,” he says.
That means you have to take the time to get to know the people and how they do business. Overseas, relationships come long before actual sales, in most cases.
Here’s the rest of Goodlin’s checklist for export success:
- Your senior executives must make a huge commitment to doing business overseas because they will be doing most of the relationship building.
- Expect to make a large number of trips to those overseas destinations. “They want to see you more and more,” Goodlin says.
- Be prepared to share three to four times the information you typically provide to prospective customers. “Customers desire education on your products,” he says.
- Expect your first sale or contract to take as long as three to four years to close, which may be how long it takes to develop a comfortable relationship with the customer.
- Expect some language barriers. But, Goodlin says, most prospective customers want to speak English in the meetings, even if their English is substandard. “They’ll use you as the English teacher,” he quips.
- Transportation within some countries can prove difficult, so leave lots of time to get to your business destination.
- You need a local agent within your target country, which you can locate through U.S. government officials.
Overall, Goodlin says, entering the export arena as a senior executive “does change the way your life is, and your husband or wife won’t see you much ... but they say absence makes the heart grow fonder.” Daniel Bates (firstname.lastname@example.org) is editor of SBN.