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STEP into Exporting
Some consider being in the right place at the right time pure luck, while others credit it to intuition, experience and even wisdom. Whatever the reason, Donald McKeny found himself in the right place while attending a reception in Tucson hosted by the Arizona District Export Council. There he would make contacts that would further his efforts to expand his international operations into markets he’d not pursued such as Mexico, Vietnam, and the United Arab Emirates. With existing customers in Singapore, Malaysia and Hong Kong, he knew the potential for his healthcare service overseas but it wasn’t until he met Robert Blaney - the U.S. Small Business Administration’s (SBA) Arizona District Director - that he learned of government programs and services designed to help companies expand business in overseas markets. McKeny’s business, Mardon IHS, offers customized turn-key database systems to doctors and hospitals that create electronic patient records without having to change their current record keeping systems, and as a result virtually doing away with paper records. The process is invisible to the user and it allows for instantaneous access to patient records, even, for instance, as the patient transitions from inpatient hospital care to outpatient continuing care, or from doctor to doctor. Imagine visiting a doctor who can electronically access your medical history in mere moments, seeing past and current treatments, medicines, test results no matter where you’ve received care. That may mean better illness diagnostic and treatment options. McKeny’s service even offers patients a thumb drive containing all their medical records that they can carry from doctor to doctor - no more toting hard copies of records or remembering every detail of your medical history. At the reception, Mr. Blaney shared details of a new federal grant initiative called STEP (State Trade and Export Promotion Program) designed to assist businesses such McKeny’s expand into overseas markets. He also introduced him to Kevin O’Shea, administrator of the program for the Arizona Commerce Authority. Further, he was introduced to representatives in the Department of Commerce’s Commercial Service whose mission is to host overseas trade missions and provide U.S. Embassy support to American companies looking to expand into foreign markets. The STEP program is an SBA trade and export initiative funded by federal grants to states designed to increase small business exports. The program offers financial support for small business participation in foreign trade missions, trade shows, translation of marketing documents, and U.S. Embassy Commercial Service services overseas. Embassy support includes setting up meetings with potential clients, a translator to help with language barriers, and market and economic analysis tailored to a company’s target market. Through the STEP program, small businesses receive grants to cover all or portions of the costs of these services. The programs also helps businesses access training opportunities and better understand the many federal programs designed expressly to help develop or expand overseas markets for American goods or services. McKeny’s first experience with the program was participation in a trade mission to Mexico. STEP paid for translation of his marketing materials and the cost of U.S. Embassy assistance in setting up targeted meetings with five to ten potential customers a day. Also provided through the Embassy was a translator for his meetings. According to McKeny, “Everyone was bending over backwards to help and I was hooked.” “It was on the Mexico trip and through the meetings set up through the Embassy, that I realized my service would help industries outside the healthcare field realize the same cost savings and operational efficiencies. It opened my thinking to an entirely new market.” “As a Vietnam veteran, I envisioned the Department of Defense using our service to track a soldier from enlistment to retirement and for the Veterans Administration to seamlessly take over those records.” That Mexico experience led to discussions with Kevin O’Shea and the Commercial Service folks about joining trade missions to Vietnam, Thailand, Chile and Peru and well as countries in Europe. McKeny knows that with growth comes the need for increased access to capital so he’s using the free counseling services of another partner of the SBA and the Arizona Small Business Development Center Network in Phoenix in preparation of pursuing an SBA Patriot Express Loan. Patriot Express loans are designed for veterans and offer caps on interest rates, longer terms and do not allow balloon payments. Prospects are brighter for the future of Mardon IHS and, as a result of the STEP program; the company may soon have customers in markets it never before considered. McKeny has some advice for other small business owners: “Realize that there are organizations out there like the SBA that offer assistance. Educate yourselves about their programs and services and take advantage of what they and other government agencies have to offer. Don’t get caught up in what you don’t have, instead pursue the assistance that is simply waiting for you to use.” When asked about the secret of his success he answered: “Perseverance. We never spent what we didn’t have and stayed within our means. We looked for a niche where there would always be demand in good times and bad, and found it in healthcare which we all need from birth to death. And, we stayed small and only moved into targeted markets when it made good business sense.”
The Seeds of Success
Sabrina Hallman has learned a lot about how to grow a successful family business. A former principal at a Tucson school, Hallman took a leave of absence from her job in 2007 to go to Nogales to check on her father Rod and the seed company he’d started in1989. “I heard from people who were concerned about my father’s health,” she says. Rod was in the early stages of dementia and could no longer run the company. Hallman decided to stay and run the company but only if the current COO, Carlos Fisher agreed to stay on. He did and Hallman began learning the business from the ground up, calling it a crash course in seeds and seed management. She took classes in biotech, agriculture and management. Her background in education helped. “I knew that I could learn it if I could find the information,” she recalls. “The seed business is extremely competitive and very international.” On a recent visit to Mexico, where the company does a huge business, she ran into a contingent of Israeli customers in the back room of a Chinese restaurant. “The next day, I was out with a Greek agronomist who was looking for tomato seeds in Mexico. There is a lot more money invested in produce than most people realize.” Hallman met Tucson Small Business Development Center (SBDC) counselor Alex Cooper in 2010 after the company’s bank was sold. As a result, Sierra Seed needed a new line of credit to carry its receivables during the off season. “The seed business is seasonal, but our bills are not,” notes Hallman. “Our primary business is in Mexico and most of our receivables and assets are there. Many banks won’t touch us because of that.” Cooper, who had been in the banking industry for over 30 years, connected Hallman with numerous banking contacts and Chase Bank came through to provide a line of credit that also helped Sierra Seed finance a greenhouse expansion that diversified the company’s offerings. Its new capacity won the company recognition from Syngenta International, one of the largest agribusiness companies in the world. As Hallman puts it, “The contacts that the SBDC shared with us were willing to cross the border and look at our facilities. Unless you go and experience the agriculture business in Mexico firsthand, you have no idea how big and profitable it is.” The sun has shone on Sierra Seed’s investment and in 2011 the company’s revenues topped $10 million. Hallman has remained a client of the SBDC, working with counselors there on finance, accounting and strategic planning. “SBDC workshops are also exceptional,” she says. “You walk out at the end of the day with new knowledge that you can put to work right away.” Being a female business owner in a male-dominated industry and culture can be challenging, but Hallman keeps her eye on the goal. “The culture of México is very male-dominated, so our COO Carlos takes the lead when we are down there,” she notes. “You have to be okay with that, forget about your ego and take a back seat, knowing that it’s all for the good of the company.”
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