In the past month, HSP has been picking up media steam.  Please see the articles and blogs below.





Tips for Small Businesses Looking Abroad
By Matthew Bandyk
Posted February 22, 2008

The game of international trade is not just for big multinational corporations. Small businesses are increasingly outsourcing administrative and other tasks to other countries, while the knowledge work is done back in the States. They're also getting more involved in directly selling their goods to foreign markets because of growing ease in finding buyers (think eBay) and a weaker dollar. Here are some tricks of the trade that small-business people have used to help expand their global reach:

Try social networking. Even if a business is too small to send its own people around the globe, it doesn't have to. Some websites let potential international employees find U.S. firms. Elance.com is one where for a subscription fee buyers and sellers of services can look for each other. This website has become a major spot for foreign workers to sell their services to Americans, according to Steve King of the Institute for the Future. Seventy percent of those offering their skills on the website come from outside the United States, while almost all of the buyers are domestic.

Use affordable communication tools. While instant messaging is used mainly for family and friends to connect, global small-business people now use this cheap means of communication to direct their employees operating abroad. Pauline Lewis runs Oovoo Design, an Alexandria, Va., company that sells handbags sewn by over 600 workers in women's cooperatives in Vietnam. Customers are mainly in the United States and Canada. Lewis says her business would be impossible without the services of Skype and Yahoo chat, which she uses to talk to the woman who organizes her business in Vietnam.

Look to where the money is. Just because a buyer is online doesn't mean the normal taxes on international trade don't apply. Certain products carry lower taxes and tariffs than others. That's true whether you are importing or exporting. Customs brokers can tell you which products carry certain advantages or disadvantages.

Budget for the barriers. Larry Harding directs High Street Partners, a consulting firm that works with businesses to ease their transition to global markets. He says one of the most common mistakes businesses make is getting into a foreign market too quickly before working around all the rules and regulations. "It's all well and good to think you can enter China and India—but you can't do it in a month," Harding says. Setting up an overseas office requires small-business people to overcome not only language and cultural barriers but also sometimes arcane labor and business registration laws. He recommends that small businesses plan to set aside 5 percent of their expected revenue to pay for these costs.

Get help from Uncle Sam. The Export-Import Bank of the United States offers small-business exporters insurance policies to protect against the risks that accompany dealing with foreign buyers, such as nonpayment for commercial reasons or perhaps a sudden civil war. This policy is aimed at any company that fits the Small Business Administration definition of a small business, but it has to meet other requirements as well, such as exporting only goods that are at least 51 percent produced in the United States.


Small Businesses Go Global
By Matthew Bandyk
Posted February 22, 2008

SolArc, a Houston company that sells software to help businesses deal with energy issues, employs only 135 people. But the company has customers in nine different countries. Like SolArc, many small businesses are finding it easier and more profitable than ever to go global. By 2018, half of U.S. small businesses will be involved in international trade, according to a report by the California think tank Institute for the Future and the software company Intuit. A third of such businesses are already doing business abroad, according to a 2007 survey by UPS.

U.S. exports are surging, and small businesses are along for the ride. According to the Commerce Department, exports last year were at an all-time high of $1.62 trillion. A weaker dollar, rising incomes overseas, and lower taxes and tariffs around the world have all helped American companies sell more abroad. But certain technological advances have particularly aided small businesses to export. For one, the creation of PayPal means that small businesses—which generally can't hire large legal teams—can be assured they will get paid when they do international business online.

The Internet has also leveled the playing field. "The single biggest barrier for small businesses is matching buyers and sellers," says Steve King, one of the authors of the Intuit/Institute of the Future report. The Web allows small-business people to find consumers directly without incurring the expense of global travel.

But small businesses aren't just going global from behind a computer screen. They can go after foreign customers in other ways. A wellspring of new consultants who can guide small businesses through the complicated process of dealing with foreign tax and labor laws has made setting up shop overseas feasible for more than just big multinationals.

Four years ago, SolArc was doing well and selling its services to big corporations like ConocoPhillips. But all the company's clients were domestic. Tim Smith, SolArc's controller, says that the company saw international opportunities in new airlines and energy companies popping up in Europe and Asia, but "we didn't have the manpower to chase it." SolArc enlisted the help of global business consultants High Street Partners to set up offices overseas. The result: It won new clients like Singapore Airlines. Smith says SolArc made $10 million last year from foreign clients, compared with "only a few hundred thousand" in 2003.

As the global economy continues to expand, there's even reason to think that small businesses may have some competitive advantages. As people get richer, they demand more and more specialized products that are not mass produced. So, as incomes in China and India rise, consumers there will be willing to pay a premium for authentic niche goods that small businesses can provide.

Will American small businesses cash in on this demand, as far away as it is? King says that the small businesses that have been lured into exporting by the weak dollar are here to stay. "A lot of people are exporting who have never exported before," he says. "They're discovering how easy it is to do."



Bangalore Tigers blog
UAE: The Up and Coming Tech Hotspot
Posted by: Steve Hamm on February 21

When I stopped over in Dubai on the way home from India late last year, I was struck by the contrast of wealth and poverty in the airport. While the many first-class and business-class clubs are crawling with well-heeled folks, and the first floor is basically a vast tax-free upscale shopping mall, the regular waiting areas were crowded with poor people of many nationalities—many of them sleeping on benches or even on the floor. It’s the new global crossroads, with money and people passing through or stopping for a while. It turns out, the UAE, those little dots on the map, are becoming a big deal for the global tech industry. Larry Harding, CEO of High Street Partners, a globalization consultant, says the UAE has emerged as the new expansion hotspot. “The UAE is smoking hot,” he tells me. “They’re buying everything and building out cities. They’re trying to make Dubai and Abu Dabi the Hong Kong of the Middle East.”

High Street Partners advises small and medium-size companies on how to manage global expansion. Two-thirds of them are venture-backed, pre-IPO startups. For the past several years, most of HSP's action has been in India and China, but now UAE is taking off as a place to do business. Harding has noticed a couple of major trends in the past couple of years. His clients are expanding globally much earlier in their lifecycles--attracted by the growth opportunities in emerging markets.

Since they're moving to developing nations rather than settled ones like Germany, the UK, and Japan, there's a lot more complexity involved. India's full of bureaucratic red tape. In China, the rules seem to change every few months. And UAE is just plain foreign. Most companies have Chinese or Indian managers or executives who can help them navigate in those markets. But few have Arab managers. Harding advises companies to do a lot of talking to other companies that have operated successfully in the UAE before they take the plunge. There's a communications gap. One of his clients, not a tech company, hired and trained a bunch of nurses in India for employement in Dubai, only to discover that it had hired people with the wrong skills. A lot of tech companies that are doing business in the UAE are hiring Indian engineers to do their software programming, so, where three cultures merge, there's plenty of risk of miscommunications.


Please click here to access the ZDNet article regarding VAT.