The Thanksgiving holiday celebrated in the U.S. is often referred to as “that time of the year” to signify the season of the calendar when Christmas (December 25), Hanukkah (December 10, 2020), and Kwanza (December 26) preparations officially begin. With the Thanksgiving holiday comes Black Friday, an unofficial holiday that often makes or breaks retail businesses profit revenues through the end of the calendar year. The Saturday after Thanksgiving is marked by Small Business Saturday, also known as “Stand for Small” campaign, or “Shop Small”. This year, Small Business Saturday falls on November 28, 2020.
The United States also identifies November as National Entrepreneurship Month dedicated to the everyday successes of entrepreneurs and innovators.
In the spirit of Small Business Saturday (Stand for Small campaign), National Entrepreneurship Month, and approach of the Thanksgiving and Holiday baking season, EXIM interviewed Mark Anderson, Director of Finance, at Chefmaster, a small business in Fullerton, CA, to share some of his insights and experiences about exporting.
Chefmaster specializes in producing food coloring, liquid gels, sprinkles, and other baking supplies, such as food decorating pens. Their company slogan is “We Help You Celebrate”. Chefmaster has been in business for 75 years and appears to be very holiday-centric. Their selections include vibrant colors for fun decorating activities of baked goods to spark imagination at kids’ baking parties, the amateur baker like me, or the professional pastry chef to experiment for their own personal designs and creations.
Let’s get started with the interview:
1) As a small business company, how many employees do you employ in the United States? Of that number, how many are dedicated to your U.S. export operations?
Chefmaster, Mark Anderson response: “We have a total of 35 employees with zero dedicated to exporting operations within the United States. In fact, I am the only person that manages the EXIM relationship.”
2) Can you share some internal decisions that prompted Chefmaster Inc. to seek international markets for your products and why you engaged with EXIM?
Chefmaster: Mark Anderson response: “The decision came from strictly dealing with the risk of overseas credit. Most of our customers are cash in advance. We were looking for a competitive advantage, that was effective and not cost prohibitive as a way to extend payment terms to a few foreign distributors that did not accept our cash-in-advance payment terms.”
3) How many countries are you currently exporting your baking supplies and what percentage of your overall business revenue is dedicated to export sales annually?
Chefmaster Mark Anderson response: “Chefmaster is exporting to 42 countries with 30 percent of our revenue dedicated to export sales. Again most of this export revenue is cash- in-advance payment.”
4) Would you mind sharing some information about your experience working with EXIM personnel and what changes your company was able to implement with support of EXIM products or programs?
Chefmaster Mark Anderson response: “My experience has been good. Getting started with an EXIM rep was excellent and finding a broker (Brett Tarnet Insurance Services) to help manage my account. I have not had a default on a debt, so I cannot tell you what it will be like if something actually goes wrong.”
5) What advice would you give other small businesses about exporting?
Chefmaster Mark Anderson response: "As a small business, we have found some tremendous upside with exporting. By providing our baking supplies to international markets, it has helped us increase our revenue with consumers outside the U.S., and partner with distributors in foreign countries to make our products available, but not all of these foreign distributors accept cash-in-advance payment terms which are favorable to us. For those that want payment terms, we use EXIM’s Export Credit Insurance to reduce our risk by extending credit to foreign customers as a way to compete for sales, and have the backing of EXIM in these transactions, if we do not get paid. Exporting has helped us reach customers in global markets and increase sales. On the surface it looks like a great way to do international business at a low cost.”
Thus, Chefmaster is another company that uses EXIM’s Export Credit Insurance to offer open account credit terms to increase sales with foreign customers while protecting their accounts receivable from foreign customers’ nonpayment. EXIM’s Export Credit Insurance covers up to 95 percent of the invoice value if a foreign customer fails to pay resulting from bankruptcy, protracted default, war, revolution, insurgency, and more.
The Export-Import Bank of the United States (EXIM) supports U.S -based small to medium-sized businesses with trade finance solutions to help American small businesses export their products or services to foreign customers as an added revenue stream for their companies. EXIM follows the U.S, Small Business Administration (SBA) classifications for determining small and medium-sized business operations:
Thank you to Mark Anderson for participating in this interview to support Stand for Small (Small Business Saturday) and National Entrepreneurship Month with EXIM.
Have questions about how you can get started with EXIM financing support for exporting? Request a free consultation with one of our regional experts!