July 2019
S
mall manufacturers don’t need to think small.
In an era that is more global and interconnected
than ever, manufacturers of every size can compete
globally if they commit to an expansion strategy and
utilize available resources.
“We have become a stronger company because
we are competing in a bigger arena,” says Patrick
Curry, president of Saginaw-based Fullerton Tool
Company. “More competitors force us to get
stronger in all aspects of our business. It helps you
to see what you are doing right and, more impor-
tantly, it shows you where you are lacking.”
The story of Fullerton Tool’s expansion is
similar to the experiences of many manufacturers
that are already active in Canada, Mexico, Europe,
China, Japan and other regions around the world.
The strategies, connections and lessons learned from
their experience can help domestic manufacturers
dip their toes into new markets and grow faster and
farther than they thought possible.
“We make tough-to-manufacture tooling
components and many of our customers were going
global in their business model — that made us take
a serious look at targeting certain markets, first with
our nearest neighbors, Canada and Mexico, before
expanding broadly to other locations over time.”
Canada and Mexico represent a massive percentage
of Michigan’s global trade. In 2017, the two countries
purchased more than $34 billion in manufactured
goods from Michigan — more than the rest of the
world combined. With such opportunities to sell your
products to neighboring nations, expanding into
those markets can give you a leg up on the competition
and set your brand up for long-term success.
The Argument Against: The Time Isn’t
Right, There’s a Downturn Coming
When times are tough, it’s only natural for a
business to think about halting expansion to focus on
domestic sales. Many international business experts,
however, suggest the opposite is not only important
but necessary to combat a slowing economy.
“A downturn, or threat of one, is frequently just
the push a management team needs in order to look
globally,” said Jade Sims, international trade specialist
with the International Business Center at Michigan
State University (MSU-IBC). “Diversification, in
terms of products, industries and consumers is
necessary in a constantly changing climate. And, let’s
face it, things are changing more quickly than ever.”
When looking to grow during tight economic
times — or capitalizing on a booming economy —
taking advantage of some of your core competencies
while diversifying risk can be a major asset.
MiMfg Magazine
Where, Oh Where, Should
My Business Go?
If you’ve never looked to expand beyond the U.S.
borders, deciding on where to go can be a difficult
first step. Choose wisely and your business could grow
quickly. Choose wrong and the impact could slow
future expansion and even impact your existing sales.
“NAFTA has facilitated trade with Canada and
Mexico, creating a dynamic cross-border industry
ecosystem — shipping to our neighbors generally
tends to be comparatively easy and cheap, with a
few exceptions,” said Sims. “Michigan’s other big
partners — China, Germany, Japan, Brazil, South
Korea — are good indicators of where to start. Look
to the countries with existing free trade agreements.
These create lower tariffs and make U.S. products
more affordable to overseas clients.”
Choosing the right countries to expand to can be
very company-specific. The U.S. Census Bureau can
tell you who is the largest international buyer of any
particular product — critical information for any
manufacturer but especially those that produce a
diverse array of products.
Locating Resources that Help
Luckily for manufacturers, there are plenty of
valuable resources — locally, nationally and abroad —
to help make their first foray overseas successful. Once
you identify the opportunities you want to pursue, it’s
time to connect with the knowledge professionals.
“A great aspect of Michigan’s export resources is
that we all work closely together — so I don’t think
there’s a wrong door,” Simms stated. “The U.S.
Commercial Service (the trade promotion arm of
the U.S. Department of Commerce’s International
Trade Administration), Small Business Development
Centers (SBDCs), The Center, Michigan Economic
Development Corporation (MEDC) and their
international trade programs, the Small Business
Administration (SBA) and the MI-STEP grant
program, and the International Business Center at
MSU are some great places to get started.”
When Patrick Curry and the Fullerton Tool team
needed assistance, these and other organizations were
critical in ensuring they weren’t taken advantage of
or pursued the wrong path.
“The U.S. Commerce Department was one of
our biggest allies in expanding the right way,” said
Curry. “They will do the due diligence for you if you
reach out. They’ve helped save me a ton of money
and headaches by pointing us away from potential
partners who aren’t who you want to be working
with. Remember, it’s an investment. To expand
properly you need to invest in time, market research,
travel, follow up and support. Commerce has
plenty of resources to help you invest wisely.”
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