Local companies should find ‘path of least resistance’

Small companies in the CNMI can venture out in the export business and become successful if they find “the path of least resistance” and “quality people to do business with,” according to John Holman.

Holman, director for the Pacific Islands Hawaii Export Assistance Center, was on Saipan to conduct o a presentation on exporting opportunities, strategies, and availability of financial resources at the American Memorial Park last Wednesday.

In an interview, Holman explained that finding “the path of least resistance” means identifying which international market a local company can get into “in the shortest amount of time, with the least amount of cost and effort, and generate the greatest return.”

This process, he said, can be carried out by doing a market research to develop an “international strategy,” taking into consideration the right market where people would want the product or service your company offers, “then pursuing that path.”

Holman said finding quality people to do business with—whether customers, distributors, or partners in the chosen international market—is also key.

He said getting started in the export industry is “absolutely not” a monumental task, noting that some local companies are already into the low cost export business by selling their products to tourists. “That’s a bit of an indirect export where you’re not shipping it but you can market to them.”

Holman said having a “web presence” or making the product or service available online through e-commerce will also bring in more potential to the business, allowing the company to sell directly to consumers. He said this would be most effective if the company’s website is available in the chosen market’s language.

“It generates revenue then they can invest by going to the market and then maybe finding partners directly to grow their business,” he added.

Holman noted that Honolulu faces similar challenges with the CNMI in that it is burdened by high shipping and freight costs.

“The key is to focus on high-end markets—countries where people have a lot of high disposable income and they’re willing to pay a premium for products because we know the shipping costs are going to be high,” said Holman. These markets include Japan, Hong Kong, and Singapore.

Leveraging the CNMI’s brand of being a clean and beautiful tropical island will also boost marketing efforts, he said.

Giving an added value to an agricultural product or consumer goods and “putting a island spin to it” can also be the way to go, said Holman.

Another way of getting into the export business is to tap on U.S. mainland companies that don’t have a global presence and represent their products to international markets.

“We know that only 1 percent of U.S. companies export internationally,” Holman told Saipan Tribune. “Only 1 percent. A lot of them, they’re just focused on the domestic market. It’s a big market but they’re not looking at international opportunities.”

Holman also pointed out that growing service providers such as real estate, financial services or architectural and engineering consulting in the international market is “relatively easy.” “You don’t have the same challenges of bringing in raw materials and shipping out finished goods.”

Whatever product or service that local companies plan to export to international markets, Holman emphasized that financing options are available at the Small Business Administration and the Small Business Development Center.

Among these is SBA’s State Trade and Export Promotion or the STEP Program designed to help increase the number of small businesses that are exporting and to raise the value of exports for those small businesses that are currently exporting so they can grow and create jobs.

“The CNMI is going to get over $1 million of that, which is more than almost all the rest of the States in the country to do export promotion,” said Holman.

Holman said about $700,000 of the amount is going to be for tourist promotion in key markets. “But that’s alright because there’s plenty money for other companies to take advantage of it as well.”

For more information about the STEP program, visit the CNMI SBDC office in Capitol Hill or call 664-3018.