Exports for little guys

Help: A little-known U.S. export service is helping small companies make the leap to international trade.

July 29, 2004|By Sara K. Clarke | Sara K. Clarke,SUN STAFF

Executives at CTRL Systems Inc. successfully sold their diagnostic equipment to all sorts of customers in America and even sold it for use aboard the International Space Station.

But when it came to the down-to-earth challenge of selling around the globe, the task seemed larger than the small Westminster company's limited marketing resources. The company's annual revenue is less than $5 million.

Yet with some help from the U.S. Export Assistance Center in Baltimore, CTRL took the plunge. It worked with trade assistants in the Baltimore office to identify the best foreign distributors for its products, which use ultrasound to diagnose the condition of mechanical equipment.

CTRL executives say the government aid opened the door to significant international growth.

The company has expanded to 11 countries, and is negotiating in four others, said Robert Roche, the company's founder and chief executive officer. It draws 30 percent to 35 percent of its revenue from exports, he said.

The Export Assistance Center in Baltimore is manned by representatives of the U.S. Commercial Service and the Small Business Administration. It has helped hundreds of Maryland companies look for new markets abroad over the past 10 years.

"What area businesses need to know is that they have a gateway to world markets right here on Pratt Street," said Bill Burwell, director of the export center in the World Trade Center.

Roche, whose company received an exporting award from the government in 2003, agrees.

"The challenge to anyone, especially a small company, is that what you do in your particular niche is really a small secret until you get the message out," he said. "What you can really do with these departments is use them as an effective means of getting that message out."

The Baltimore Export Assistance Center was the first of its kind to open in the nation.

"As soon as a small business has talked to me, they've locked themselves into a global network of almost 2,000 people," said Mathew Woodlee of the Baltimore center, one of 1,800 trade specialists working with the Commercial Service.

The U.S. Commercial Service has offices in 78 countries. The service, a global business unit of the Department of Commerce with a budget of $190 million, assisted $35 billion in export sales in fiscal year 2003.

The Commercial Service assisted Maryland companies with $680 million in international trade in the past nine months, compared with $280 million during fiscal year 2003.

In total, Maryland businesses logged $4.9 billion in exports in 2003, less than 1 percent of the total national exports, the Department of Commerce reported.

Untapped potential

Typically, the potential for small businesses to export is untapped, said Anne Grey, former director of the Baltimore export assistance center. For example, 97 percent of U.S. exporters have fewer than 500 employees, and their goods equal less than 30 percent of U.S. exports, according to the Department of Commerce.

With 95 percent of the world's consumers living outside the United States, this export potential is promising.

"It's a steep learning curve, but it's a profitable one," said Deborah Conrad, a senior international credit officer with the Small Business Administration, who works in the office here.

The U.S. Export Assistance Center in Baltimore is one of 108 across the country. With six full-time trade assistants, the local office provides counseling and market research at costs affordable to small and medium-size businesses.

In 2002, Conrad assisted United Source One, an international food distributor that deals with restaurants in the Middle East. With about 35 employees, the company does all of its business through exports.

As the business developed, President Michael Imgarten found himself faced with a problem - banks were wary of the cash-intensive enterprise and were reluctant to finance an international endeavor.

He found Conrad, who evaluated the company. She offered a guaranty to a local bank, which would have reduced its risk if Imgarten's company defaulted on its loans. Conrad and the Small Business Administration were able to persuade the bank to lend the money to get United Source One off the ground.

"They helped us where it counted," Imgarten said. "You really need somebody fighting for you as a small business, because most people are not."

With 2003 sales revenue at $45 million, United Source One was the Small Business Administration's regional exporter of the year for 2004, and was named the fourth-fastest growing young company in America by Entrepreneur Magazine.

To identify help for local companies, the Department of Commerce relies on referrals from partner organizations, including the World Trade Center Institute; the Maryland Office of International Operations; and the Maryland and Washington, D.C., District Export Council. The groups work together to give companies the best match of services.

Arranges meetings

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