Hawaii Pacific Export Council

Stand Up to Economic Downturns with Good Financial Practices
They will help you survive

Broad economic slowdowns can often trickle down to small businesses, including those in relatively stable industries or geographic locations. Individuals tend to cut back on discretionary spending while corporations curb routine activities, delay major purchases, and shelve new initiatives.

For many small businesses with limited resources, these and other factors often combine to pressure bottom lines past the breaking point, creating a domino effect of other dilemmas such as a credit crunch or layoffs.

A downturn doesn’t have to spell disaster for your small business, it may actually be a great time to expand and / or increase market share or prepare yourself to be ready when the market improves so you are positioned to take advantage. Good financial management practices will help you weather even the worst of economic times, and be ready to capitalize on new opportunities that will inevitably come when good times return.

Begin with the basics. Even when times are terrific, no small business can survive without good recordkeeping, budgeting, cash flow monitoring, and credit management. Have strong systems in place.

Consult your bank. Lenders can tap their vast experience in economic cycles to advise you on issues specific to your business and industry. Depending on your projected long-term expenses, consider arranging a line of credit in case a cash flow gap occurs.

Be on good terms with your creditors. Falling behind on payments is never the answer, even if it’s “just this once.” Creditors will be more amenable to renegotiating terms to small businesses they consider to be conscientious and reliable.

Watch your receivables. By the same token, you need to stay on top of any outstanding debts to your company, particularly problem accounts. Be firm, but also willing to negotiate where appropriate. As a small business owner, you do you best to meet your obligations to your customers. So it’s only natural to expect them to pay their bills on time, right?

Unfortunately, the answer is not always. Most customers are conscientious about making timely payments, but others may require some extra effort. Though frustrating and time-consuming, collecting from delinquent accounts is not something you should put off or simply hope will work itself out. Every dollar of revenue counts toward keeping your small business afloat.

Obviously, prevention is the best way to avoid having to deal with collections in the first place. Establish a standard payment policy and make your customers aware it before starting work. Your invoices should also clearly state when the total amount is due and the fee for late payments.

Scrutinize your spending. Rather than arbitrarily slashing your budget, strive to spend only on those things that have a justifiable positive effect on your business. That will make it easier to redirect money to areas that enhance business performance.

Step up your review of financials. Assessing your reports weekly or biweekly rather than monthly will put you in a better position to make informed decisions. Similarly, a monthly or quarterly review your business plan enables you to adjust your strategy and direction to changing market conditions.

Keep marketing in the mix. Look for cost-effective ways to keep your company visible to current customers and potential new markets. They may be ready to restart their spending long before the headlines proclaim an end to the economic crisis.

Keep your company, product, service, and name in the media and in front of the consumer. A low cost way is press releases.

Aside from the news item itself, the most important parts of a press release are the headline and first paragraph. Editors sift through dozens of press releases a day; they rarely read anything that doesn’t immediately grab their attention. Get to the point by organizing the first paragraph around what your news is, who it’s about, and why it’s important. Then, use brief supporting paragraphs to add detail.

Remember that like a resume, a press release is designed to pique interest, not tell the entire story. As such, limit your release to no more than two double-spaced pages.

Your company’s logo and contact information should be at the top of your press release. It’s also helpful to include a name, address, and phone number or email in the text.

Once your release is ready, contact the publications or media outlets to identify the right editor, and whether they prefer to receive releases by regular mail or electronically. Make sure you spell the editor’s name and title correctly. Releases with errors or addressed to long-departed predecessors often go into the trash unread.

www.hawaiipacificexportcouncil.org

Hawaii is in such a great place at this time with the opportunities created by world events.

Ideal climate, great broadband connectivity due to the military presence based here, our proximity to large, new, emerging markets, our population diversity, multi lingual citizens and many other reasons. We are able to work across cultures and time-zones in a seamless global network

Today, customers worldwide demand more involvement and more customization from companies they buy from, something Hawaii Businesses know something about. No single firm is big enough in scope and size to satisfy the experiences of one consumer at a time. The larger the companies the more focus is on access to resources and large markets.

To successfully compete in the 21st-century business, we must reinvent the processes and culture in order to sustain competitive, innovative solutions.
Many companies in various industries will succeed because they are able to change, or fail because they can’t keep up with changes.

There are changes in customer demands today, in the pace of business, in the use of technology, new economic powers, new affluent consumers and new consumer needs. The window of opportunity is no longer what it was and the shelf life of a success story is much shorter. These new customer demands and trends are going to be with us for a long, long time. What is your company prepared to do about it?

There are over 2 billion new consumers developing in India and China right now, staggering numbers? Can your company afford to take its time, when competitors are going after these new markets and consumers, accelerating customer engagement, product development, and cementing relationships?

There are many solutions and services Hawaii based Companies are able to offer through quality service, innovation, knowledge of hospitality, CRM and client services. This is how we built our “Tourism Niche’” with the “Aloha Spirit”.

ING Direct, a new service being located in Waikiki at the old Local Motion location, ING DIRECT will open an Internet cafe on the ground floor of the building at 1958 Kalakaua Ave., where customers will be able to purchase coffee access the Internet and learn about the online bank’s investment tools, services, and deposit and loan products. Educational investment programs to assist people in their investment needs. Maybe this will fail; maybe it will be a huge success. Credit must be given to ING for creativity, trying and innovation.

On line learning centers world wide are offering great, quality educational services and products tailored to meet the demands of students needs and desires on demand. Many of these centers are managed by world class universities, MIT, Harvard, and Stanford as well as thousands of business and language schools. Instructors in China teaching Mandarin and Chinese Cooking, instructors in India teaching media and video courses, instructors in Japan teaching Japanese, Ikebana and making sushi. Technology helps make this possible, on demand for a fee, MIT offering classes on line free of charge.

Amazon Web Services and Facebook are teaming up to help developers build instantly scalable applications for Facebook users. Build your Facebook app on AWS to ensure reliability, flexibility, and cost-effectiveness as your application grows in popularity. You Tube video allows you to make audio/visual presentations from your web site on your products and services foe a minimal investment of time and money.

With 55 million active members worldwide, as of November 2007, Facebook’s social / business networking site allows you to create and share your applications with a massive and growing community of users. Amazon Web Services enables you to quickly implement your ideas for Facebook applications by providing an inexpensive, scalable computing platform. Using these infrastructure web services, your Facebook application is able to reach “web-scale” by scaling up and down seamlessly as demand dictates — with pay-as-you-go pricing and no upfront costs. This allows companies and individuals to market and promote their products and services worldwide in any language.

Many International firms do not like to hire large numbers of people and let them go after six months when the project is done. It costs them money as well as the security issues that allow their competitors to have insight into their business. Many would rather outsource to vendors, as they work for a large number of firms, these vendors can afford to focus a large number of talented people for short periods of time. These outsourcing companies can allocate staff from 10 to 300 or more from one location to another or one project to another in a week, a month for whatever period of time needed. Like “Temp Help Services” they offer varied skill levels and industry qualifications. They recruit internationally as well as from the US and fill positions worldwide where needed.

Staggering numbers, aren’t they? But the key point being this is happening in a short period of time, like now. Can your company afford to take its time, when competitors might be leveraging some of these vast sets of global resources to accelerate customer engagement, product development, and all-around decision making?

Many of these examples are outside the box and will seem strange however they are an example of opportunity. Opportunities within our ability that will allow us not to get locked into a set of processes and models that are not stimulating new business, not increasing profits create a depressing, unexciting, and uninspiring future for our Hawaii businesses.

DJ Halcro
www.hawaiipacificexportcouncil.org
www.hawaiiscore.org

District Export Councils: Your partners in exporting
Hawaii District Export Council is an organization of community leaders whose knowledge of international business provides a source of professional advice to firms seeking to expand their international sales. We are closely affiliated with the U.S. Department of Commerce, provide specialized expertise to the Department and its clients as well as provide support to the FCS Officer in Honolulu.

We respond to your export needs by working with the U.S. and Foreign Commercial Service (US&FCS) domestic offices and promoting greater international trade activity at the local level. We Counsel exporters, sponsor trade events, and help build local export assistance partnerships with other organizations.

There are a number of Councils nationwide with over 1,700 volunteers representing business, universities, and government. Members, appointed by the Secretary of Commerce, are recognized for their extensive knowledge of international business and access to specialized trade resources. Members provide an important source of professional advice that complements the assistance provided by US&FCS international trade specialists.

Each DEC has a membership mix which includes exporters (manufacturing and service industry), export service providers, tourism specialists and public sector trade promotion organizations. This group represents the users and providers of local export assistance services that can identify opportunities / gaps in community export programs. We also help develop local networks to provide a broad range of international trade services to the exporter. We provide assistance and infrastructure that matches available resources with business needs.

Each DEC establishes committees to address the priority objectives of their community and the Department. Committee members address issues such as trade finance, international competitiveness, and National Export Strategy initiatives. We also provide workshops and mentoring for companies that are interested in developing an export plan for their business.

A few years ago India was dealing with civil unrest and with Pakistan, a potential nuclear war threat, and its economy was seen as a also-ran in a race for growth with China. Today India finds itself in the same Western thoughts as China, both fast-growing economies, large population base and both viewed as threat and an opportunity to the rest of the world.

Asia’s emerging giants, their social and economic systems are vastly different however they have strengths that are complementary. International community leaders, business leaders and multinationals need to think more about both of these countries together rather than separate entities. There are many fronts where there is already mutual collaboration between the two; there are synergies between the two that will develop as they both move toward global importance. Relations between China and India have been improving in recent years and as they find mutual areas that facilitate each other this will continue to improve. As they both search out new markets and resources, especially in places like Africa, they will find common bonds of cooperation.

The world has seen how Japan and Korea have grown and developed over the past 20 years. In many ways there was collaboration and many mutually beneficial relationships that fostered the success for both of these countries.

China and India are two countries with many millions of Entrepreneurs so you know there will be a tremendous level of spirit and activity between the two; nothing alleviates the issue of poverty like economic success. They in many ways complement each other as China’s strength is in manufacturing, speed of decision making, the ability to plan, move and complete huge projects in a very short period of time, getting things done. China respects India’s ability to engineer, develop software, technology skills, medicine and outsourcing strengths.

Collectively they will have a huge advantage in purchasing power. The world has already seen some of this power as the demand for oil and other resources have impacted prices world wide. For many years America has had a distinct advantage in this area however this will diminish as these two powerhouses increase in global strength.

Many foreign firms view China and India’s huge and somewhat open markets as a source of customers as well as competition. There is a tremendous opportunity for International Companies and Firms to find an ever increasing number of emerging buyers for their products and services. There is a large number of Chinese and Indian Students in the US who have or are making their way back to these countries to take advantage of the growth and opportunity to do well in their careers and make their fortunes. These young people will lead the development and growth.

China and India, as they move forward to becoming the two largest economies in the world, ever, are awakening to the benefits of international education and corporate training. They have more resources for developing solutions and their growth at their disposal than any other developing country in history. Technology will allow them to access resources faster and more efficently. They understand that this creates qualified manpower that bring in professionalism, leading to higher value in terms of better efficiency and productivity. It’s a win-win situation for all as the organizations benefit due increased efficiency and the employees grow and become more well paid consumers.

There are great opportunities here for companies and business leaders who make the decision that there will be a Chinese and / or India plan in their future.

SMALL BUSINESS FAIR

“Learn the Basics of Starting or
Expanding Your Business”

Saturday, May 10, 2008
Workshops: 8:30 am – 2:00 pm
CHAMINADE UNIVERSITY
Ching Center in Eiban Hall
3140 Waialae Avenue

Here’s what we have in store to assist you:

8:30 - 9:00 Service organizations
9:00 - 10:00 Registering your company, choosing the right entity, tax
requirements
10:15 - Noon Financing, business plans, bookkeeping, marketing ideas
12:00 - 2:30 One-on-one appointments
1:00 - 2:00 Exporting Workshop

Admission is FREE! Optional Brown Bag Lunch is $5.00.

Hurry……Deadline to sign up is May 5, 2008
For registration forms, call 487-0205, 487-0202, 487-0224
or e-mail nmasuno @ fhb.com

Come and visit these exhibitors: Small Business Administration ▪ Better Business Bureau ▪ Business Action Center ▪ Chamber of Commerce of Hawaii ▪ Chaminade University ▪ DBEDT ▪ First Hawaiian Bank ▪ Hawaii Foreign Trade Zone #9 ▪ Hawaii Pacific University ▪ High Technology Development Corporation ▪ Hawaii Women’s Business Center ▪ Minority Business Enterprise Center ▪ Office of Hawaiian Affairs ▪ Small Business Development Center ▪ Small Business Law Corp ▪ SCORE ▪ US Postal Service…and more!

SPONSORED BY: First Hawaiian Bank - Chaminade University

SMALL BUSINESS FAIR

“Learn the Basics of Starting or Expanding Your Business”

Saturday, May 10, 2008
Workshops 8:30 am – 2:00 pm
Chaminade University, Ching Center in Eiban Hall
3140 Waialae Avenue

What’s in store for you:
• 8:30 - 9:00 Service organizations to help you
• 9:00 - 10:00 Registering your company, choosing the right entity, tax requirements
• 10:15 - Noon Financing, business plans, bookkeeping, marketing ideas
• 12:00 - 2:30 One-on-one appointments
• 1:00 - 2:00 Exporting workshop

Exhibitors: Small Business Administration, Better Business Bureau, Business Action Center, Chamber of Commerce of Hawaii, Chaminade University, DBEDT, First Hawaiian Bank, Hawaii Foreign Trade Zone #9, Hawaii Pacific University, High Technology Development Corporation, Hawaii Women’s Business Center, Minority Business Enterprise Center, Office of Hawaiian Affairs, Small Business Development Center, Small Business Law Corp, SCORE, US Postal Service and more.

SPONSORED BY: First Hawaiian Bank - Chaminade University

For information, call Naomi at 487-0205, 487-0202, 487-0224 or e-mail nmasuno@fhb.com

———————————————————————————————————————————————-

Admission is Free! Registration deadline to reserve your space is May 5, 2008.
Brown bag lunch cost: $5 (optional). Please make check payable to First Hawaiian Bank.

Name(s):
Company:
Address:
City: Zip: Phone:
E-mail: Fax:
Total Lunches: Total Amount Enclosed: $

One-on-one 30-minute appointments: Please indicate 1st, 2nd, 3rd choices and times preferred (Noon to 2:30 pm), if interested.
[ ] Small Business Administration [ ] Financing
[ ] Marketing [ ] Business Plans
[ ] Business Counseling [ ] Importing/Exporting

Please fax this Registration Form to 487-0210 or e-mail nmasuno@fhb.com to reserve your space.
If you are ordering lunch, please send a copy of this Registration Form along with your check to
Naomi Masuno at First Hawaiian Bank, 98-1071 Moanalua Road, Aiea, HI 96701

Are You China Ready?

1. Prior export experience to at least one foreign market. ( ) Yes ( ) No
2. Commitment to developing export opportunities including top management support, designation of an internal China sales manager, sales and technical staff who are willing to travel to China often, and support staff including an interpreter or translator to facilitate communication with Chinese buyers. ( ) Yes ( ) No
3. Sufficient financial resources to actively support marketing of products in China including translation of product brochures, participation in trade shows, and organization of customer informational seminars. ( ) Yes ( ) No
4. Ability to host visits by potential buyers to conclude sales negotiations, facilitate pre-contractual equipment inspections, and provide installation training. ( ) Yes ( ) No
Suggestion: If you answered NO to any questions 1-4, your company should consider identifying an export management firm with China experience or approach a different market with fewer technical, logistical, cultural and business risk hurdles before attempting business in China.
5. Ability to acquire and analyze Chinese market data, identify sources of competition including domestic and foreign firms, and ascertain distribution channels. ( ) Yes ( ) No

6. Ability to acquire familiarity with export logistics unique to China including negotiation of letters of credit, freight forwarders, export documentation and export licensing. ( ) Yes ( ) No

7. Ability to locate Chinese import regulations, safety certification and labeling requirements and cultural preferences to modify the product and its packaging.
( ) Yes ( ) No

8. Prepared an international marketing plan with realistic goals, China-specific marketing strategies, progress benchmarks and an exit plan. ( ) Yes ( ) No
Suggestion: If you answered NO to any question numbered 5-8, the China BIC website can provide more information. Please review the frequently asked questions, visit the industry information page for market research and the exporting reference page to learn about Chinese import regulations. The U.S. Commercial Service Hong Kong can advise on the pros and cons of reaching mainland China through HK.

9. Sufficient financial resources to engage the services of local attorneys or consultants to navigate China’s system of international trade regulation, develop a sales contract that is enforceable in China, undertake due diligence investigations, and address problems. ( ) Yes ( ) No
Suggestion: If you answered NO to question 9, you have determined your company is able to begin market activity, but may be unable to effectively address problems when they may arise. To learn more about how the U.S. government can help address market access barriers, challenges to bidding on major projects, or resolving commercial disputes, visit the assistance page. The U.S. Commercial Service offers customized services to undertake due diligence investigations and obtain market research concerning your product and clarify basic import regulatory issues. If you conclude that these resources are insufficient and the cost of private service providers is excessive, reconsider whether your company can sustain market activity through serious regulatory challenges.

10. Ability and financial resources to provide training for a Chinese sales agent or distributor in the United States, continuous guidance for conducting market research and planning sales
goals. ( ) Yes ( ) No
Suggestion: If you answered NO to question 10, your company may be able to explore the market, but will eventually need to augment capabilities in order to support expansion of market activity. Some new-to-market firms explore the market through direct exports while acquiring market knowledge. After this phase, a firm evaluates whether market prospects merit commitment of resources to select and manage a Chinese sales agent or distributor. The U.S. Commercial Service can help your firm identify a qualified sales agent or distributor through the International Partner Search or Gold Key Service.

11. Ability to establish a program for protection of intellectual property including trademark or patent registration, market monitoring, and enforcement strategy. ( ) Yes ( ) No
Suggestion: If you answered NO to question 11, your company’s marketing plan may assume too much commercial risk. China’s system for protecting trademarks and patents is based on a first-to-file principle. To establish a legal right to prevent others from appropriating intellectual property rights established in the United States, it is necessary to register in China. To learn more about protecting intellectual property in China, review the Intellectual Property Toolkit, located in the China BIC’s exporting page. Speaking with local legal service providers in China is also recommended. An expanded reference list of legal service providers is available through the Contact China resource guide. American companies can also receive one hour of free IPR consultation from a legal expert through the China IPR Advisory Program.

12. Commitment to providing domestic and foreign customers equivalent service quality, which may necessitate frequent travel to China by a technician or establishment of an equipment service and maintenance center with a Chinese partner. ( ) Yes ( ) No
Suggestion: If you answered NO to question 12, your company may need to commit more resources in the future to maintain the quality of service delivery or the installed equipment base. At this time, China does not permit a foreign company to establish wholly foreign-owned service and maintenance centers. Most companies with a mature market presence eventually establish a joint venture service center with a Chinese partner. An alternative approach is establishing a regional service center through markets such as Hong Kong. The US Commercial Service in Hong Kong can facilitate identifying local partners.

www.hawaiipacificexportcoucil.org