Growing A Global Enterprise
How to get your business off the (U.S.) ground and into other countries.
THE INTERNATIONAL MARKET IS EVEN MORE OPEN FOR BUSINESS NOW. THE POTENTIAL TO OPERATE IN CUBA, THE PANAMA CANAL EXPANSION AND THE TRANS-PACIFIC PARTNERSHIP ARE EXPANDING OPPORTUNITIES IN GLOBAL MARKETS, AND COMPANIES IN SOUTHWEST FLORIDA ARE IN A PRIME POSITION TO TAKE ADVANTAGE.
Already, at least 1 million jobs in Florida are related to international trade and investment, making it one of the state’s strongest sectors, according to Enterprise Florida. Local companies with operations and clients overseas include bigwigs like Arthrex, ASG Software Solutions, Hertz and Gartner; tech firms such as Air Science Technologies, Cybersecurity Defense Solutions and Dataworks; and manufacturers such as Shaw Development, Special Coatings and Inovo.
“At some point, you’ll see the west coast [of Florida] be a haven for folks to do business in South America,” says John Patrick Boland, Lee County’s director of economic development.
Local companies shipping products overseas anticipate working a little faster when the $5.3 billion Panama Canal expansion opens in late June. The wider, deeper waterway will allow bigger and more container ships to travel through. “This is one of the key ocean routes that’s going to change essentially,” says Michal Svoboda, chief operating officer of Allyn International Services, based in Fort Myers.
More cargo coming into Florida from the Canal will enhance the infrastructure of the state for global trade, says Kevin G. Brady, an international trade specialist with the Florida Small Business Development Center at Florida Gulf Coast University. Florida is already a gateway for the merchandise trade between North America, Latin America, the Caribbean and other regions of the world.
Even though Southwest Florida doesn’t have a deepwater port, more goods are expected to be trucked or sent by rail to and from Miami because of the widening of the canal.
“It’s going to open up a lot of transportation jobs,” he says.
In addition, if plans for a cargo airport in Hendry County come to fruition, it could provide an alternative option to Miami and could handle perishable goods, such as fresh flowers and seafood, from Latin America. “This is going to be huge for Hendry County. It’s going to be like winning the lottery for them,” Brady says.
The Trans-Pacific Partnership (TPP), signed in February 2016, will remove more than 18,000 taxes related to U.S.-made products going to Australia, Canada, Japan, Malaysia, Mexico, Peru, Vietnam, Chile, Brunei, Singapore and New Zealand. While some of these markets are already under current trade agreements with the United States, the TPP will expand and diversify trade opportunities, and Brady expects the federal government will enhance communication and create more intensive programs to facilitate trade.
“This new TPP is going to really open up some new avenues, I think, and just further enhance some of the ones we’ve already worked with,” he says.
By providing increased access to large-growth markets, such as Malaysia and Vietnam, Brady believes the TPP will promote made-in-America products, fueling business in a range of industries. Manufacturing is a key industry, but Brady has non-manufacturing clients who have expressed interest in working internationally, too, including a data security firm.
U.S. trade opportunities with Cuba continue to move slowly, as Americans are faced with investment restrictions and are permitted only to trade with state-owned companies, mainly those run by the military, Brady says. Within those state-run companies, U.S. exporters are currently limited to industries such as infrastructure, food products/processing and education. If direct cargo flights to Cuba from Southwest Florida are added, however, Boland says the barriers for some businesses could be eased and the path would be open to expand exponentially in Cuba.
Local Help For Operating Abroad
Florida is the state with the seventh-largest amount of U.S. exports annually, but it boasts the second-largest number of exporters, after California. It’s not all large corporations, either. More than 95 percent of Florida exporters are small- and medium-sized enterprises with 500 or fewer employees, according to Enterprise Florida.
Brady has helped develop more than a dozen comprehensive export marketing plans for businesses in the past three years. For example, Brady identified Mexico as a possible market for Polygon Solutions, a manufacturing company in Fort Myers, and gave the company a step-by-step plan to implement. The company, which makes rotary broach tools, attended an international trade show in Mexico in 2015 and gained customers.
“The biggest obstacle that companies have is just fear. It’s fear of the unknown. It’s something new that they maybe don’t understand,” Brady says. “The ones that have had success, they educate themselves. They take advantage of no-cost programs. They ask for advice. Then they implement it.”
When Brady worked as an international sales manager, there were always foreign companies and individuals who wanted to bend the rules, he says. They would offer bribes or ask to falsify documents to lower their exposure to import duty rates and taxes. But the penalties imposed by the U.S. government were too great for him to risk it. “You can potentially lose your license to export and all revenues associated with exporting,” he says.
Local economic development leaders are trying to boost access and assistance for companies with existing global operations or plans to expand internationally. As part of this initiative, Collier County recently hosted business leaders from France. Through Enterprise Florida’s Gold Key/Matchmaker Grant program, qualified Florida small- to medium-sized companies in business for at least two years can receive up to $1,000 to generate or increase their export sales overseas. Lee County companies Shaw Development, CPR Tools and K&K Super-Blend have already received grants, according to the economic development office.
One company that is already well into international markets is Somero Enterprises, a manufacturer of laser-guided and technologically innovative concrete machinery. It sells equipment in 93 countries and has a new 14,000-square-foot, $5 million global headquarters and training facility in Fort Myers. Somero’s products are marketed in Asia, Africa, Europe, Latin America and the Middle East, and it has offices in the United Kingdom and Shanghai.
Another local company, eMaint Enterprises, was awarded up to $180,000 in performance-based incentives to create 150 jobs (with an average annual wage of $55,200) over the next three years in Lee County. The provider of computerized maintenance management software helps clients in 55 countries and provides onsite training to global clients in Estero. With 87 employees worldwide and operations centers in Dublin, Ireland; and Marlton, New Jersey; it plans to occupy 26,000 square feet on U.S. 41 in Bonita Springs, which will be a $2 million capital investment.
Lee County director of economic development Boland, who has worked in the Middle East, China and South America, says companies interested in working in other countries should start with a clear picture of their core business and customer profile. Then they should identify the same customer profiles elsewhere in the world, but be willing to tune up or make modifications to the product or service.
“That’s the one mistake people have made in the past,” he says. “[They] assume that everybody wants to consume what we consume in the U.S.”
During his tenure, Bill Cary, former president and chief operating officer of GE Capital, experienced business conducted in 50 different markets. He was responsible at one point for all of the company’s consumer finance activities around the world. To adapt to different cultures, he says it’s important to be sensitive to the language and business practices in those countries. You can’t have a “cookie-cutter” approach, he says.
“And despite the language or the country in which you do business, the core culture of the company has got to be supreme,” he says. “That has to be integrated with all the cultures that people live and work in. Our customers don’t think about the world in a U.S.-centric way.”
What I Learned: Michael Svoboda
CHIEF OPERATING OFFICER, ALLYN INTERNATIONAL SERVICES, WHICH HAS REGIONAL HEADQUARTERS IN FORT MYERS, SHANGHAI AND PRAGUE. THE COMPANY PROVIDES TRANSPORTATION MANAGEMENT, LOGISTICS SOURCING, FREIGHT FORWARDING, SUPPLY CHAIN CONSULTING, TAX MANAGEMENT AND GLOBAL TRADE COMPLIANCE. SVOBODA WAS BORN IN THE CZECH REPUBLIC AND HAS WORKED FOR ALLYN SINCE 2000, BEGINNING ONSITE IN OSLO, NORWAY, AS BRANCH AND OPERATIONAL MANAGER. HE MOVED TO THE U.S. IN 2008 AS GLOBAL LOGISTICS MANAGER.
BEST BUSINESS PRACTICE IN OTHER COUNTRIES
“We have always respected the laws and regulations in the country. We try to find good partners and good employees that will have similar values as our company. One of our key values is integrity. We know that in certain parts of the world, the standards of fair and transparent purchasing differs, but we do apply or try to apply the same standard regardless of any region that we are in. We don’t compromise that, period. In certain situations, you may say, ‘I’m not going to work for this client because otherwise it’s going to compromise our integrity and our standards.’”
BEST WAYS TO F IND LOCAL PARTNERS IN OTHER COUNTRIES
“Whenever we establish a new subsidiary, we try to travel there and meet with potential partners. [Allyn does business in more than 20 languages and has experience in both developed and emerging markets.] Each employee we hire, we really need to see face to face. It’s something we do throughout the world. Since we are a service company, it starts with the hiring process. At the end of the day, they will be more engaged, a better team player and provide better customer service.”
BIGGEST ADJUSTMENTS IN WORKING INTERNATIONALLY
“[In Africa, the challenges are] certain infrastructure in terms of Internet availability. We still need to rely on old-fashioned phones in those regions. If you want to be global, those things will always be there. You simply need to adjust.”
BEST WAYS TO UNDERSTAND CULTURAL DIFFERENCES
“When you travel, observe how people react. Something that is very customary in the U.S. could be shameful basically to different parts of the world. Someone that has not traveled across the world [needs to] study more … prior to going there. If you have reliable partners or set up employees, you learn more about the culture. In certain parts, it’s refreshing and gives you a different respect.
FUTURE GROWTH FOR ALLYN
“We are setting up an entity in India right now. We are thinking about Singapore. When we set up an entity, it always goes to the fact that is there a need? Is there a client need for different kinds of reasons?”
What I Learned: Gil Morzaniga
CEO AND EXECUTIVE VICE PRESIDENT, CROCI NORTH AMERICA. THE FAMILY-OWNED AND OPERATED COMPANY HAS MORE THAN 50 YEARS OF EXPERIENCE IN SHUTTER DESIGN AND MANUFACTURING FOR THE WHOLESALE MARKET. HEADQUARTERED IN ITALY WITH NORTH AMERICAN OPERATIONS BASED IN FORT MYERS, ITS 120,000-SQUAREFOOT BUILDING OPENED IN 2009 OFF METRO PARKWAY. THE COMPANY HAS ABOUT 30 EMPLOYEES LOCALLY.
BIGGEST CHALLENGE TO OVERCOME
“I was working in France. My dream was to come to the U.S. [to work professionally]. They were doing $1 million in sales at that time and only focused on hurricane protection. My goal was to develop the business and make it grow locally, statewide, nationwide and also internationally. But my first day at the job here was the day before Sept. 11. After Sept. 11, everything was very, very difficult. But we eventually bounced back.”
HOW THEY GREW
“During 2004-06, with the construction boom and all the hurricanes we had, the business was really booming. We went from $1 million in sales within the first five years to $18 million. The owner was ready to give a statue for me or something, kind of wondering what was going on. When we started the business in ’93, we built the [20,000-square-foot] building off Topaz Court in Fort Myers. In the growing process, we bought a second building, 30,000 square feet. We decided to buy 10 acres of land on Adelmo Lane and then build a 120,000-square-foot building just off Metro. Of course at that time, the timing sounded perfect for us. Then (the housing market) collapsed. We struggled for a couple of years.”
BIGGEST ADJUSTMENT TO SURVIVE
“We started in the hurricane protection business … but then we refocused into security products. Then we developed some new products for sun protection and insulation. We were selling 80 percent in Florida. Today, [we are selling] 25 percent in Florida and 75 percent in islands, Mexico, Canada, the Caribbean, other states.”
TIPS FOR GROWING BUSINESS IN OTHER PARTS OF THE WORLD
“I was born in France. You have shutters over there on pretty much every house, but more for sun protection, not for hurricanes. Everybody was telling me, ‘You’re the hurricane protection guy.’ I was trying to explain to them, ‘Yes, it can be used for hurricanes. But look at it in a different way and how you can use it.’ One of our markets actually is families with young kids. The kids are getting up with the sun. Putting shutters in the bedroom brings darkness to the room. Listen to the market. See what the customer wants and needs. Then adapt products to the need. Our success was really the flexibility and listening to the customers, instead of going there and trying to convince them, ‘We have the best product for you.’”
BIGGEST BARRIERS TO DOING BUSINESS INTERNATIONALLY
“Our trucks getting to the docks in Miami is challenging. If you can’t deliver [materials and products] Tuesday by noon at the dock, you’re going to miss the boat, and they’re going to be delayed a week. You can’t miss that ship. We have to be very careful how we do business and how we ship the material, because shipping can be very expensive. It can double the cost of the material, and the customer doesn’t really want that.”