Time To Venture Abroad - Page 3 of 4

Time To Venture Abroad

to U.S. products. In 2003, $6.9 billion worth of merchandise was shipped from the U.S. to Africa. While South Africa accounts for 40% of U.S. exports to the region and serves as a hub for product distribution throughout the continent, it is not the only market in Africa. Other options are Nigeria, Angola, Ghana, Kenya, and Cameroon. Sectors that stand to do well on this continent include chemicals, construction, automotive, information technology, healthcare, cosmetics, medical, and transportation equipment.

“Trade agreements definitely help to make a country trade friendly,” says Kenneth D. Weiss, author of Building an Import/Export Business, 3rd Edition (John Wiley & Sons; $19.95). “We’re moving in general toward trying to establish trade agreements with more countries, either in regional groups or one by one. These agreements definitely facilitate trade because they set rules and lower barriers.” Weiss notes that one concern many entrepreneurs have is currency exchange but says that most transactions can be done in U.S. dollars.

Fiscal Matters
As with any business, financing is an issue that also needs to be addressed early on. Father-and-daughter team Sam Ennon, 60, and Samantha Ennon, 37, co-owners of Belmont, California-based Coiffure Marketing Group, approached their friends and family to help get them started. “We started with $40,000, and that was enough to create the package design and the produ
cts,” says Sam. Coiffure Marketing Group manufactures and sells beauty and haircare products targeting African Americans and Latinos in the U.S., Brazil, and England. Sales for the 10-year-old firm totaled $500,000 in 2003. “But we ran out of money, so we had to keep going back to family and friends.” In the end, the Ennons wound up investing about $100,000.

Initially, the two planned to sell their products exclusively in the U.S. — until they realized how hard it was to land distribution deals. “The market is so competitive here in the U.S., especially for small, black manufacturers,” says Sam. “Most of the companies that were doing good business in the ethnic markets sold their companies to the Revlons and the L’Oréals.” So the pair decided to look abroad. Currently, only 20% of their products are sold domestically, with the remaining evenly split between Brazil and England.

One of the Ennons’ early hurdles was finding competent, reputable distributors. They turned to the Commerce Department for help. In November 2002, the firm participated in a trade mission to Brazil, supported by the department’s Global Diversity Initiative, and signed an agreement with a local distributor. “The brand that we’re selling now in Brazil is called Shades of Silk,” says the elder Ennon, who began his career in Clairol’s marketing department. “It has relaxers and conditioners and shampoos, and it’s geared toward people with curly hair.” This spring, the company will head to Africa to identify potential partners.

Just like any business, being prepared increases the odds for success. “It’s tough enough to be a business owner here in the U.S., and it’s just a little more challenging if you’re going to take it abroad,” says Rosales. “So the more