The International Opportunities Available to Entrepreneurs Today — Laurent Kahl

The strong US dollar has necessitated a strategic shift for companies engaged in the export of products and services. On this week’s episode of The Playbook, host Mark Collier, area director for the UGA Small Business Development Center, is joined by Laurent Kahl, business consultant with the UGA SBDC International Trade Office, who shares share important emerging trends and strategies for export companies.

Transcription:

Mark Collier:
Welcome into The Playbook Laurent.

Laurent Kahl:
Thank you, Mark. I appreciate the opportunity to be here.

Mark Collier:
Absolutely, man. Before we launch into it though, just kind of give me a little background on yourself, man. Where’d you grow up and kind of how’d you land at the UGA SBDC?

Laurent Kahl:
Absolutely. Well, my dad was the one that gave me this passion and bug for my international business career. I was born in Caracas, Venezuela. He had started Sears Roebuck. He was a Chicago guy like you, and started Sears overseas, there’s stores in Latin America, Central America, and Europe. So had the opportunity to live in, I don’t know, eight countries before I went to college here in Indiana. And he, and actually with that experience, I learned multiple languages and cultures and it gave me a bug, an initial bug and love for international business. So that’s why it’s good.

Mark Collier:
All right. Well, fantastic. So from international business, did you work for a couple of companies and then land at our organization, or kind of give me a little bit about your career path.

Laurent Kahl:
Sure. After living overseas, I went to college, Wabash College in Indiana. Graduated with a business degree, a bachelor’s degrees in business and languages, and then went straight into international sales. I started my career in Savannah Georgia actually.

Mark Collier:
Fantastic. Great port city. Listen, as I said in my lead in, US Dollar, a lot of strength over the last couple of months, and that’s kind of changed the game in terms of how companies have to respond out here in the marketplace. So what current kind of trends and challenges have you seen lately in the export business as a result of this strong US dollar?

Laurent Kahl:
Well, that’s a headwind naturally, the strong dollar, but there’s always opportunities for companies that have unique, one of a kind or very specialized niche products or services overseas. There’s always a market for that. Also, because their freight rates have dropped lately in the last six months.

Mark Collier:
Oh, that’s good to know, good to know.

Laurent Kahl:
Both inbound and outbound is also good news for importers and exporters. If there is a recession coming up, which we don’t know whether it’s going to be a soft landing or a very hard landing recession, there’s opportunities overseas with wealthier countries that have lesser recessionary problems.

Mark Collier:
Sure, sure.

Laurent Kahl:
For example, the Middle East is always very… Have a lot of wealth. There’s countries in the Nordic countries of Europe, Japan, there’s other countries overseas that could offset some of the recessionary problems here. So if you want to focus on other markets overseas while there’s a recession here, it could help you counterbalance the sales here in the US.

Mark Collier:
That’s a great point. There are some companies that are less interest rate sensitive than others. Companies that have great stores of wealth, like some of the oil countries in the Middle East. So a good strategy as you enumerated for companies here, if the market demand is here due to the recession, you’ve got to look outside of our borders. And it’s my understanding that 80% of the consumers of the world live outside of our borders anyway.

Laurent Kahl:
Yeah, absolutely. There’s so much opportunity overseas. Naturally, some countries are not as wealthy and don’t have the size like the US, but there are many opportunities overseas with the consumer base being much greater than here. And it’s a growing consumer base. Africa’s growing, Latin America. Their consumer base is growing, Southeast Asia. It continues to be opportunistic times for companies here based in the US.

Mark Collier:
All right. Makes sense. Let’s delve a little bit more into your specific role here at the International Trade Office. So kind of talk to me a little bit about how you work with small and medium-size enterprises. Where do you begin? Is there an assessment period first to see if they have a viable product or service, and then how do you walk them through the process of beginning that export experience?

Laurent Kahl:
Yeah, good question. Normally what we try to do first is to, like you said, assess their situation. First of all, we try to see if their products could be exportable or importable. Services also, not just products. We also look at their strategy, their business plan, whether in the future they would like to do an export or import business plan and look at committing their company resources and products towards the international part of the business. With that, then we can identify markets overseas. We look at their product characteristics or their service characteristics, and we do research to find best potential markets. We also help them with the import export mechanics from putting together the products, the marketing, the packaging, the advertising and all that. And then helping them go through the logistics and having the product index, finding the buyers overseas and the arrival of the products overseas. So from A to Z, we do the whole that thing.
We also help in digital marketing and media, how to strategize or give them suggestions into improving their websites or finding what we call international market localization or with a strong SEO, search engine optimization and things of that nature. We also help them with the shipping and distribution networks. We have a client, we’re working together and a client, as you know, that we’re trying to improve or seek ways to better their international logistics situation. The other thing is we help them with the setup of their import/export department, and they also need an ecosystem of service providers. They need a good banker, they need a good, on the export side, a good freight forwarder that helps them with the arrangement of their cargo and their documents and all that. They need a good CPA for all the tax implications of doing business overseas and the regulations, a good trade compliance person, because they not only have US regulations here, the overseas regulations absolutely also apply to whatever country they’re going to. So they have to know about those things. And a lawyer, naturally a lawyer is also important.

Mark Collier:
Lawyers always have to extract their pound of flesh somewhere along the supply chain.

Laurent Kahl:
That’s right. They’re always involved. But yeah. So you have to have that kind of system as well in place, and all of them specializing in the international business or trade sector.

Mark Collier:
You raised a key point there, and that’s important. You can get a lot of service providers and teaming partners that are well-versed in certain areas, but if they don’t have that deep entrenched export/import international trade experience, they’re not going to be of great value to companies who are seeking the export. So that’s a very good point there. So let’s talk about what are some of the key items for a Georgia-based company? What do they need to do foundationally in order to succeed in international trade?

Laurent Kahl:
Well, the first thing that we look for is some kind of history here in the US. Some success.

Mark Collier:
Successful track record.

Laurent Kahl:
At least three to five years. We look for companies that are established that’ve had success here, that’ve learned their lessons here, that have taken out all the bugs in their products and system, et cetera. That’s number one. Number two is capital. Companies need capital, particularly in the export or import venture, because it’s a long-term play, and also it requires an investment in people and time, and also modifications that I mentioned earlier in the products or services. There’s some things that you have to invest to do it properly. The commitment, we like to see upper management being committed to the export or import venture. And also having them create their own import/export department with people being dedicated strictly to the export or import activity. Exporting is not a part-time job. It’s a full-time job. So we look for that. That’s very important. Again, a product or service that’s importable or exportable, that you can modify, that can adapt for the overseas markets.
Also, if a company has excess production capacity or inventory, that’s another good reason that they can offer their products or service for export as well. And also we look for companies that want to learn about the mechanics of exporting and importing. That’s importing.

Mark Collier:
Sure. Absolutely, absolutely.

Laurent Kahl:
Because it’s a specialized way of doing business.

Mark Collier:
Oh, I know it is. I know it is.

Laurent Kahl:
And it’s complicated because you’re dealing with currencies, with countries, with a more complex logistics process. You’ve got flow of documents, you’ve got flow of monies between banks, and you need to understand that process.

Mark Collier:
Absolutely. What I say is you have to create an entire blueprint.

Laurent Kahl:
Exactly.

Mark Collier:
Blueprint for success.

Laurent Kahl:
Right. A strategic business plan, I forgot to mention that. But also to have a separate export or import strategic business plan in addition to the domestic one, it could be a part of that, but I think it’s very important to plan, always plan and have that kind of tool as well.

Mark Collier:
All right. Well, I recently read that Georgia, for an unprecedented ninth straight year has been the number one state for doing business here in the United States. So I think that is commendable. So let’s talk about looking forward in terms of Georgia. Why is Georgia well-positioned for international growth for the next five to 10 years?

Laurent Kahl:
Well, we’re very blessed in this state. We have great infrastructure. We have the port of Savannah, which is I think the fourth largest container port, going to be number third, number three, I’m not sure where the ranking is on that exactly on the marine side of it. On the air side of it, we have the Hartsfield International, which is the busiest airport in the world. And also growing in their air cargo, they put some warehousing investments there. Reefer Investments, good to grow that part of the business. It’s not the biggest air cargo, but it’s growing and it has the opportunity to be, and also very important on the air side. We also have foreign trade zones all over the country that help importing and exporting companies to save money on taxes and also have, there’s some benefits in re-exporting with foreign trade zones, duty drawbacks, which is a program to save on taxes, just things of that nature. The state has a diversification of industries and products.

Mark Collier:
Yes, Georgia is well-diversified. Absolutely.

Laurent Kahl:
If you look at the stats on exports of going out of Georgia, we have ag products, we have chemicals, we have insecticides, we have aircraft, airplane parts, automotive, medical instruments, machinery. So it’s a state that’s blessed in many different sectors and products as opposed to some states in the US are strictly just ag exporters or they have very individualized areas of strengths. But this one has a multitude of strengths.

Mark Collier:
Well, I think that is a key strength of Georgia, is the diversification not only across the product and service lines, but also with the people and the labor. We’ve got an educated workforce here and a workforce that is open to taking on new challenges.

Laurent Kahl:
Yeah, no, but that’s a good point. And we have a lot of universities to educate that workforce. And also one last thing I wanted to mention was the federal resources, the state resources, and the SBA, University of Georgia as being an educational resource to teach and to educate about the import/export process. So those are also other things that are important for the state.

Mark Collier:
All right. Well, very good. So as a business consultant at the International Trade Office, you’re often asked to kind of keep learning, keep growing, keep striving. So kind of share with me, what are some of the key continuing education courses or content that not only you partake of, but also you would advise business owners who are looking to export? What should they be looking at in terms of teaching themselves to better prepare themselves to be more competitive?

Laurent Kahl:
Yeah. Naturally we have monthly continuing ed classes or webinars that talk about how to develop your import/export business. We also have a great flagship program called Export Georgia that we do once a year, we’re thinking about maybe doing it twice a year, but right now it’s once a year for, that’s a five day, six day specialized class or educational training on importing and exporting particularly. The other thing also, I encourage import/exporting folks that want to learn about it to pick up books, magazines, on import/export, just go on Amazon and buy books on exporting and importing. There’s also wealth of videos provided by the federal government, the Department of Commerce. Export-U is a online training that offers free online training.

Mark Collier:
I didn’t know that. So Export-U, is that a division of the Department of Commerce?

Laurent Kahl:
No, it was actually started by a UGI SBDC consultant, Bob Irwin.

Mark Collier:
Interesting, interesting..

Laurent Kahl:
He helped put that together, but it formally started as part of our training for the University of Georgia SBDC and then they spun it off to be now-

Mark Collier:
Export-U. I like it.

Laurent Kahl:
Yeah, Export-U, it’s called that. And yeah, just nationally, just talking to, again, your ecosystem, your partners, your lawyers, learn from them, the freight forwarders, the ocean carriers. I always interviewed other parts of the sectors that are involved in trade and learned from them as well. All the professionals and different sectors of that service, the international trade field.

Mark Collier:
All right. So Laurent Call, business consultant with our International Trade Office. I want to thank you for taking time out of your busy day to come in. The international trade and export business is ever evolving, so I’m committed to bringing on experts like yourself who can give the latest and greatest tips and tricks on how to best compete in the international trade business.

Laurent Kahl:
Well, thank you, Mark. I appreciate it. Thank you for all the opportunity to work with you also and clients that you shared with me. And please reach out to us, you have a great resource here for the domestic part of it. I know that you’ve received numerous awards, Llewellyn awards, and I congratulate you for those awards as well.

Mark Collier:
Thank you much, Laurent.