But in reality, trade wars have been around for ages. It’s just easier in our ‘Google it’ world to read more of the chatter in real time. In 1806, Napoleon issued a trade ban against Britain. Guess what the British did? Sought new markets in South America.
For a quick look at recent U.S. trade spats, check out this article from The Visual Capitalist http://www.visualcapitalist.com/history-u-s-trade-wars/. Brush up on your Smoot-Hawley, Chicken Friction, Japan Jabs, War of the Woods, Pasta Spat, Battle of the Bananas, Steel Stabs, and Trump’s Tariffs.
You need a new ocean
Even in the midst of trade war frenzy, people are forgetting that the only way to swim in the Blue Ocean and avoid the shark fest of the Red Ocean is through expanding markets to less inhabited waters—exporting.
Growth through exporting helps your business better manage the ups-and-downs of the domestic economy. The National Small Business Association can prove it. From 2005-2009 (remember 2008?) small- to medium-size enterprises that were exporting had a 37% increase in revenue, while those that were not exporting saw a 7% decrease in revenue.
Since I’m from Texas, I’ll even give you a real-life example. A small, family-owned cement additive company in Garland, Texas lost almost half of their revenue during the 2008-2010 recession. Deciding they weren’t ready to throw in the trowel (get it...trowel?), they decided to start paying attention to inquiries they were receiving from potential new international customers before it was too late. Fast forward to 2018 and 35% of their business now comes from international trade.
But it’s still scary. And we get that. We know that in any business it doesn’t matter if you are selling in Boston or Beijing, there are always tough situations.
You need a compass and a guide
That’s why we developed The Riddle of the Exporter™ - an International Launch Plan that can help guide your exporting decisions whether trade wars are in the news or not.
In our 8-step process to exporting we focus Step #3 on Market Entry. Step #3 is divided into two critical sections: pricing and practical methods of market entry.
The first teaches about market entry components such as competitive pricing through landed costs. This takes into consideration duties/tariffs plus other numerous costs to “land” your product at your client’s backdoor. When tariffs skyrocket, it’s a tough rodeo trying to be competitive. Ingenious entrepreneurs are using creative negotiations, price exceptions and customer loyalty to keep clients from bailing.
The second section of Step #3 helps you identify new markets and walks you through the methods you can use to reduce the risk of your decisions and increase your success through expansion.
The domestic market may feel like a safer bet, and it may be, in the short term. And, chances are good that trade wars will continue to be a part of our dialogue in the long term.
So what’s Betty Sue’s advice?
- Trade wars be darned. Get some sound guidance. Step into new markets.
- Remember #BettySueExportQueen’s words of wisdom...somebody, somewhere is always buying something!
Gettin’ excited about exporting!
Disclaimer: #BettySueExportQueen makes no apologies that she is an avowed export cheerleader who believes exporting can save your business, cure the common cold and improve your relationships!