From Joan Goldstein’s view as commissioner of the state Department of Economic Development, companies looking to expand small-business opportunities should consider taking advantage of the state’s STEP program.
The State Trade Expansion Program is funded by the U.S. Small Business Administration to help companies expand business opportunities abroad.
Grants are earmarked to help pay entry fees to attend trade shows, for export training and compliance, and upgrades to a firm’s website to reach international markets.
“I think the help we’re able to give from getting this STEP award from the feds is that we have a number of different levels of assistance,” said Goldstein, whose department recently received a $335,600 STEP grant.
To drum up business, she said it’s critical for a small business to attend trade shows, which “cost a pretty penny.” And by that, Goldstein means the admission price is in the thousands of dollars.
“The idea that this grant could help pay for trade show admission is a significant help to small business,” she said.
A STEP grant awarded during the last fiscal year helped pay for several renewable-energy companies to attend the recent Solar Power International in Las Vegas.
The grant also helped several companies attend Aeromart, an aerospace trade show in Montreal.
“The cluster in Quebec is humungous,” Goldstein said. “So this is a great opportunity to help these small component manufacturers in Vermont do business with the larger OEMs (original equipment manufacturers).”
Goldstein said the grants are important for a state the size of Vermont because larger states have far greater financial resources to promote international trade.
In addition to trade shows and export education, she said the grant can also help pay for website translations.
AJ Rossman, founder of Smart Resource Labs, a solar data management company, said thanks to one of the recent grants his company was able to attend Solar Power International, a key sales venue.
“Once you get your product to a certain stage and you’re ready to sell it, I think the trade shows are great,” said Rossman, whose Burlington company was acquired last year by Infiswift of California. “For me, It’s a concentrated place for a lot of my customers to be at and for people to be really talking about what’s next, and ideas, and things like that.”
In some cases, he said you’re able to close a deal on the spot.
Susan Mazza, international trade officer with the Small Business Administration Vermont office, said doing business abroad offers opportunities but also challenges. “The one thing I can say that can be challenging with exporting, is very often it can be a long process between trying to export and actually doing the exporting,” Mazza said.
She said foreign companies tend to be more cautious in developing business relationships, which slows the process.
Mazza said another benefit of STEP is that participants are then able to mentor other companies new to exporting.
She said many businesses become “accidental exporters,” starting with one or two orders online.
Exporting can also be a good business strategy to balance the ups and downs of domestic sales, Mazza said.
In addition to defraying the cost of trade shows, the grant helps pay for companies to attend ExporTech, a 12-week program run by the Vermont Manufacturing Extension Center that counsels small businesses on developing an export plan for their product or service.
“You have to have an understanding (of) where are you going to go to market and what are you marketing and how do you deal with the different rules and regs,” Goldstein said.
In conjunction with STEP, the SBA has export loan guarantee programs through local banks ranging from $500,000 to $5 million.
The smallest of the three loan programs guarantees up to 75 percent on a loan between $350,000 and $500,000 with a 90 percent guarantee below $350,000.
Mazza said the two larger programs are up $5 million with a 90-percent guarantee.
One program is a term loan for working capital, equipment, real estate and inventory.
The third program, known as the Export Working Capital Loan Program, covers the cost of a specific contract, including labor and raw materials.
Since STEP was created in 2010, Vermont has received more then $1.4 million in grants. This is the seventh time the state has been awarded a STEP grant. In 2017, the SBA awarded $18 million to 44 states.
More than 1,200 Vermont companies exported $3 billion worth of goods and services in 2016, with computer and electronic products accounting for nearly two-thirds of all exports, according to the International Trade Administration report on Vermont Exports, Jobs, & Foreign Investment.
Global Foundries (the former IBM plant) in Essex Junction, has long been the state’s largest exporter of computer and electronics parts.
The Burlington area ranks among the top 100 largest exporting market areas in the country, with exports valued at $2.1 billion, representing 78 percent of the state’s exports.
For more information on STEP, visit accd.vermont.gov/economic-development/programs/international-trade/grants.