Feature: Global Biz 101
From November 2006
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Global Biz 101
When a client of furniture maker Ken Endelman asked him to craft a piece of Pilates exercise equipment, taking his business global was the last thing on his mind. It was the mid-1970s, when Endelman was working in Southern California, and the equipment, known as a Reformer, was being made by the craftsmen who built Hollywood sets.
“The people making the Reformer before I started were charging over $3,000,” he says. “That’s compared to a new Volkswagen that cost $2,000 at the time.” Endelman’s goal was to supplement his furniture-making income by building quality Reformers at a reasonable price. It took 10 years before he began receiving substantial orders, but then, Endelman says, “The five Pilates studios I was dealing with couldn’t get enough equipment.”
His entry into the nationwide and worldwide markets was uncomplicated and what Endelman calls “organic.” When a client moved his studio in 1985 to Colorado, the equipment followed via air freight. “As a furniture maker, I was familiar with trucking companies and how to pack things in the containers we made,” he recalls.
With the packed Reformer equipment in his van, Endelman was allowed to drive into the airport runway-maintenance area, where airline staff helped him load his freight onto flights to Denver.
From Oz to UK
The business expansion to London was seamless, too, thanks to a New York Pilates studio owner who moved to London. Next, orders started coming from South Africa and Australia. Today, Endelman’s company, Balanced Body Inc., a Sacramento-based business with more than 130 employees, racks up about 25 percent of its business to global sales. Spain orders the most equipment, followed by the United Kingdom, with Australia and Germany next in line.
Endelman’s advice for others thinking about global product sales is to build an excellent relationship with a reliable shipping company so you can trace your shipments from origin to destination. “They’re more likely to jump higher, meet your needs and fix problems,” he says. “If you don’t know someone with experience, at least check references or go with a big-name company, and keep a paper trail of your overseas shipments.” Another Endelman rule: Always have the customer pay the shipping costs.
Balanced Body’s story is in sharp contrast to that of sisters Lisa and Lora Watts and their sister-in-law Geanina Watts. The three women are artists-in-residence and own W Gallery & Studios in midtown Sacramento. The gallery features abstract contemporary art, including jewelry, sculpture, paintings and photography. They had dreamed about selling abroad because of its prestige and the accompanying increase in value of their art work. The problem: They had no idea where to begin.
It was a chance meeting with Janice Cooper, president of Pacific Resources and a trade import/export professional, who walked into their gallery during a Second Saturday event that helped the business partners find some answers. “Janice began putting inquiries out through her extensive network and was able to get formal reports back on the art market,” Lisa Watts explains. “We found that England and Italy are extremely hot markets for American art and artists at the moment.”
What was most shocking to the gallery owners was the value-added tax that other countries charge. “For instance, shipping into Germany will cost you 16 percent of the value of the product,” Lisa Watts notes. “So, if you are selling a painting for $1,000, you will pay shipping (which can be quite expensive depending on the size) plus $160 value-added tax.”
While the business partners are using Cooper to make the majority of their contacts in the global market, they’re spending about one-quarter of their time doing research and making contacts through relatives, friends and business associates in Romania and Germany. They also plan to travel. “Many business transactions can be handled over the internet,” Lisa Watts says, “however, the personal touch is occasionally the difference between whether or not a deal gets made.”
They advise other businesses seeking to expand internationally to hire a global-trade consultant to network and look for opportunities to collaborate.
Selling services to foreign countries is another commodity that businesses have to offer. “It’s not just about putting something in a box and sending it somewhere,” Cooper says. “I have also helped foreign companies that have come to the U.S. (and are interested) in entering the U.S. energy and transportation infrastructure markets in California.”
And Vice Versa
When foreign countries come to the United States looking for business partners, more opportunities are created. It’s not unusual for foreign delegations to come to Sacramento. In July, for example, the Sacramento Regional Center for International Trade Development hosted several Chinese business delegations representing industries such as petroleum, machinery, auto manufacturing, engineering and municipal construction.
“They wanted us to educate them about how to understand credit risk, management and terms of payment – things they’ve never experienced before because they were state-owned enterprises,” says Brooks Ohlson, the center’s director. “We’re training them by bringing in a cadre of speakers, including bank, insurance-industry and joint-venture specialists and the corporate counsel for the state.”
The international trade center is funded by the state community college chancellor’s office and has many free offerings for small and medium-sized businesses, including how to do market research, how to move into the global arena and how to work with shipping companies, along with financial how-to’s and essentially building a well-informed foundation to do business overseas. “The hardest thing is finding partners in another country,” Ohlson says. “Who do you trust, and how do you get to know them?”
One way to get some answers is through American embassies and chambers of commerce in foreign countries, according to Prasad Naik, a UC Davis professor of management. “The U.S. Embassy is your best friend outside the United States, especially in the formative stages,” he says. “Someone in the economic and/or commercial section has the local information about businesses, financing sources, labor conditions, market conditions, legal requirements, the political situation, U.S.-foreign country relationships and all the information that one needs to know before starting a business in foreign markets.”
Another helpful stop is at the U.S. Export Assistance Center, part of the U.S. Department of Commerce, which provides help and information in six areas: world market research and targeting, international sales channel development and management, global promotion and advertising, export and trade finance, foreign government regulations and international documentary requirements.
Many of the center’s services are free, but you could pay up to $3,000 (in recovery fees) if it helps you find an international business partner in a new country, provides market research or plans development strategy to enable you to create a new sales market channel. “At the end of the day, we are a jobs program,” George Tastard, director of Sacramento’s U.S. Commercial Service, points out. “If a small to medium-sized company finds a sustainable sales channel, they will, for example, have to hire someone to make more widgets, or speak Spanish in Mexico or French in Nigeria or Morocco, and they will need more bodies to maintain those sales.”
Another source of information in Sacramento is the Northern California World Trade Center, a nonprofit organization that, as part of its services, provides training for businesses, builds alliances and organizes trade missions. The center has joined the other entities named in this article to fill the gap left in 2003 when the California Trade, Technology and Commerce Agency was eliminated. That state-funded agency provided California companies with export help and had 12 overseas trade offices.
By educating yourself before you dive into the international market, you can save yourself money and potential headaches. As Tastard reminds, “Just because someone has money, it doesn’t mean you want to sell to them.”
These websites provide information, including training, trade shows and trade missions.
Sacramento Regional Center for International Trade
U.S. Department of Commerce
Federal government’s Export Portal
The Northern California World Trade Center
The Trading Game
By Judie Fertig PannetonWhen a client of furniture maker Ken Endelman asked him to craft a piece of Pilates exercise equipment, taking his business global was the last thing on his mind. It was the mid-1970s, when Endelman was working in Southern California, and the equipment, known as a Reformer, was being made by the craftsmen who built Hollywood sets.
“The people making the Reformer before I started were charging over $3,000,” he says. “That’s compared to a new Volkswagen that cost $2,000 at the time.” Endelman’s goal was to supplement his furniture-making income by building quality Reformers at a reasonable price. It took 10 years before he began receiving substantial orders, but then, Endelman says, “The five Pilates studios I was dealing with couldn’t get enough equipment.”
His entry into the nationwide and worldwide markets was uncomplicated and what Endelman calls “organic.” When a client moved his studio in 1985 to Colorado, the equipment followed via air freight. “As a furniture maker, I was familiar with trucking companies and how to pack things in the containers we made,” he recalls.
With the packed Reformer equipment in his van, Endelman was allowed to drive into the airport runway-maintenance area, where airline staff helped him load his freight onto flights to Denver.
From Oz to UK
The business expansion to London was seamless, too, thanks to a New York Pilates studio owner who moved to London. Next, orders started coming from South Africa and Australia. Today, Endelman’s company, Balanced Body Inc., a Sacramento-based business with more than 130 employees, racks up about 25 percent of its business to global sales. Spain orders the most equipment, followed by the United Kingdom, with Australia and Germany next in line.
Endelman’s advice for others thinking about global product sales is to build an excellent relationship with a reliable shipping company so you can trace your shipments from origin to destination. “They’re more likely to jump higher, meet your needs and fix problems,” he says. “If you don’t know someone with experience, at least check references or go with a big-name company, and keep a paper trail of your overseas shipments.” Another Endelman rule: Always have the customer pay the shipping costs.
Balanced Body’s story is in sharp contrast to that of sisters Lisa and Lora Watts and their sister-in-law Geanina Watts. The three women are artists-in-residence and own W Gallery & Studios in midtown Sacramento. The gallery features abstract contemporary art, including jewelry, sculpture, paintings and photography. They had dreamed about selling abroad because of its prestige and the accompanying increase in value of their art work. The problem: They had no idea where to begin.
It was a chance meeting with Janice Cooper, president of Pacific Resources and a trade import/export professional, who walked into their gallery during a Second Saturday event that helped the business partners find some answers. “Janice began putting inquiries out through her extensive network and was able to get formal reports back on the art market,” Lisa Watts explains. “We found that England and Italy are extremely hot markets for American art and artists at the moment.”
What was most shocking to the gallery owners was the value-added tax that other countries charge. “For instance, shipping into Germany will cost you 16 percent of the value of the product,” Lisa Watts notes. “So, if you are selling a painting for $1,000, you will pay shipping (which can be quite expensive depending on the size) plus $160 value-added tax.”
While the business partners are using Cooper to make the majority of their contacts in the global market, they’re spending about one-quarter of their time doing research and making contacts through relatives, friends and business associates in Romania and Germany. They also plan to travel. “Many business transactions can be handled over the internet,” Lisa Watts says, “however, the personal touch is occasionally the difference between whether or not a deal gets made.”
They advise other businesses seeking to expand internationally to hire a global-trade consultant to network and look for opportunities to collaborate.
Selling services to foreign countries is another commodity that businesses have to offer. “It’s not just about putting something in a box and sending it somewhere,” Cooper says. “I have also helped foreign companies that have come to the U.S. (and are interested) in entering the U.S. energy and transportation infrastructure markets in California.”
And Vice Versa
When foreign countries come to the United States looking for business partners, more opportunities are created. It’s not unusual for foreign delegations to come to Sacramento. In July, for example, the Sacramento Regional Center for International Trade Development hosted several Chinese business delegations representing industries such as petroleum, machinery, auto manufacturing, engineering and municipal construction.
“They wanted us to educate them about how to understand credit risk, management and terms of payment – things they’ve never experienced before because they were state-owned enterprises,” says Brooks Ohlson, the center’s director. “We’re training them by bringing in a cadre of speakers, including bank, insurance-industry and joint-venture specialists and the corporate counsel for the state.”
The international trade center is funded by the state community college chancellor’s office and has many free offerings for small and medium-sized businesses, including how to do market research, how to move into the global arena and how to work with shipping companies, along with financial how-to’s and essentially building a well-informed foundation to do business overseas. “The hardest thing is finding partners in another country,” Ohlson says. “Who do you trust, and how do you get to know them?”
One way to get some answers is through American embassies and chambers of commerce in foreign countries, according to Prasad Naik, a UC Davis professor of management. “The U.S. Embassy is your best friend outside the United States, especially in the formative stages,” he says. “Someone in the economic and/or commercial section has the local information about businesses, financing sources, labor conditions, market conditions, legal requirements, the political situation, U.S.-foreign country relationships and all the information that one needs to know before starting a business in foreign markets.”
Another helpful stop is at the U.S. Export Assistance Center, part of the U.S. Department of Commerce, which provides help and information in six areas: world market research and targeting, international sales channel development and management, global promotion and advertising, export and trade finance, foreign government regulations and international documentary requirements.
Many of the center’s services are free, but you could pay up to $3,000 (in recovery fees) if it helps you find an international business partner in a new country, provides market research or plans development strategy to enable you to create a new sales market channel. “At the end of the day, we are a jobs program,” George Tastard, director of Sacramento’s U.S. Commercial Service, points out. “If a small to medium-sized company finds a sustainable sales channel, they will, for example, have to hire someone to make more widgets, or speak Spanish in Mexico or French in Nigeria or Morocco, and they will need more bodies to maintain those sales.”
Another source of information in Sacramento is the Northern California World Trade Center, a nonprofit organization that, as part of its services, provides training for businesses, builds alliances and organizes trade missions. The center has joined the other entities named in this article to fill the gap left in 2003 when the California Trade, Technology and Commerce Agency was eliminated. That state-funded agency provided California companies with export help and had 12 overseas trade offices.
By educating yourself before you dive into the international market, you can save yourself money and potential headaches. As Tastard reminds, “Just because someone has money, it doesn’t mean you want to sell to them.”
These websites provide information, including training, trade shows and trade missions.
Sacramento Regional Center for International Trade
U.S. Department of Commerce
Federal government’s Export Portal
The Northern California World Trade Center
The Magazine
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