When Heydt's sales pitch didn't sway the Japanese, he decided to show them the value of his product. "The way I cracked the market was that I air-conditioned a union boat for free," he says. When the half-dozen fishermen on that boat returned from 30 days at sea, their improved attitude and productivity impressed boat owners.
Heydt's outfitting of that Japanese boat cost him less than $6,000. The return on his investment was approximately $1 million, earned by outfitting 600 Japanese fishing boats over a five-year period. "Forget the product you build," he advises. "Just solve a problem."
Today, Marine Air exports to 44 countries, primarily to pleasure-boat manufacturers in Asia and Europe. The company sells 15,000 to 16,000 air conditioners annually and generates "tens of millions of dollars" in revenues, says Heydt. Of those sales, 33% are exports, a figure that recently earned Marine Air a top exporting award from the U.S. Department of Commerce.
Heydt's export tips:
l Stop talking and listen. For a new exporter, trade shows within the country or region you're targeting are a good way to make initial contacts. "Once you step on foreign soil, you hear all these opportunities," says Heydt.
l Get local representation. Heydt visits a new market - often for several weeks - and works hard to create demand. When it's apparent there's local interest for the product, he signs on with the best-connected local rep he can find.
l Use letters of credit. A letter of credit is a document issued by the buyer's bank that guarantees payment and eliminates the seller's risk. And make sure the buyer's bank has a correspondent bank in the U.S. Otherwise, Heydt quips, "You always get paid, but it takes forever."
Funding High-Tech
This month, Enterprise Florida begins accepting applications for a new $1.5 million loan guarantee program designed for small emerging technology manufacturers. The Small Business Technology Growth Program, enacted earlier this year, will help companies with fewer than 100 employees that until now have had limited access to capital, but have the potential to create high-skill, high-wage jobs. "We already have businesses chomping at the bit," says Rep. Ralph L. Livingston, R-Fort Myers, the bill's sponsor in the Florida House. "Of all the problems small businesses have today, if you have access to capital the other problems fall away." Enterprise Florida's Technology Development Board (407/316-4600) is administering the program.
Certification for Entrepreneurs
The Jim Moran Institute (JMI) for Global Entrepreneurship at Florida State University has introduced a certified professional entrepreneur program. To become certified, individuals must have at least three years' experience as CEO or president of a rapidly growing entrepreneurial venture. They also must submit a business plan, three letters of reference and proof of ethical and moral business practices. JMI also requires an eight-hour exam (offered twice a year in Orlando) that costs $500. Before taking the test, entrepreneurs must join the JMI Certified Entrepreneurial Association ($200 per year). For more information, call 800/821-7515.
Welfare to Work
SBA
As the October cash cut-off date approaches for thousands of Florida welfare recipients, the Small Business Administration's Welfare to Work Initiative is encouraging businesses to consider hiring welfare recipients as a way to counter the tight labor market and reap financial benefits. Some highlights:
- Welfare to Work Tax Credit -- A new federal tax-credit program began in January for employers who hire and retain individuals who've been on welfare for 18 months or more. Employers who hire long-term welfare participants between January 1, 1998, and May 1, 1999, may take a 35% federal tax credit on the first $10,000 in wages paid in the initial year and 50% of the first $10,000 paid in the second consecutive year of employment. The maximum credit for the two years is $8,500.
- Work Opportunity Tax Credit -- This program lets employers take a federal tax credit of as much as 40% of the welfare hire's wages, up to a maximum credit of $2,400, for employees working more than 400 hours. Business owners receive a 25% credit, up to $1,500, for former welfare recipients who work between 120 and 400 hours. The Work Opportunity Tax Credit cannot be used in conjunction with the Welfare to Work Tax Credit.
- On-the-Job Training Incentives -- Business owners are reimbursed up to 50% of the new worker's earnings to cover "extraordinary costs of training" for up to the first six-months of employment. The employer must sign a contract agreeing to provide the training. On-the-Job Training Incentives may be used in conjunction with one of the tax-credit programs.
For more information, check with Thaddeus Hosley in SBA's Miami office at 305/536-5521 or Donna Padgug in Jacksonville, 904/443-1971.