Human beings have been adorning themselves since appearing on the planet. Ancient Egyptians used oils to protect their skin and who can forget Elizabeth Taylor’s Cleopatra with the kohl rimmed eyes? In the Polynesian culture, which traditionally did not have writing, people use tattoos to convey information on ancestry, social status, personality, values and other characteristics. Calling cosmetics “…improper, vulgar and suitable only for actors,” Queen Victoria expressed her disdain. Fortunately for women in the United States, while Queen Victoria was dismissing beauty products for proper English ladies, Madame CJ Walker of Denver, Colorado, was on her way to becoming a self-made millionaire manufacturing and selling hair products and preparations.
While estimates vary, the worldwide cosmetics industry today is somewhere in the range of $250 – 300 billion a year and is dominated by a handful of very large companies. Against this backdrop is House of Cheatham, a Stone Mountain, Georgia based company with fewer than 150 employees. This is one small business with a big footprint around the world.
Founded in 1924, House of Cheatham is one of the oldest manufacturers of personal and beauty care products in America, providing therapies for people of all ethnicities, with a special emphasis on women of color. In the U.S., the company’s products are sold through independent retail outlets as well as large chain drug and grocery stores nationwide. In addition to domestic sales, House of Cheatham exports beauty around the world to international buyers in the Caribbean, Central America, Europe, the Middle East, Africa, Australia and the South Pacific.
Like many small businesses, House of Cheatham’s growth strategy included expanding into new markets abroad. International clients, like their counterparts in the U.S., expect open credit terms – the ability for the buyer to receive products today and pay for those products at a future date - net 30, 60, 90 days, etc. All “open account” sales carry the risk of nonpayment by the buyer. If a domestic client fails to pay, a company can seek relief through the U.S. court system, but when a buyer in another country fails to pay, the U.S. based small business exporter has little recourse to recover the money owed. Unless, of course, the receivables generated by the foreign transactions are insured.
Export credit insurance from EXIM is the solution House of Cheatham uses to grow their international sales while mitigating the risk of nonpayment by international buyers. With export credit insurance, up to 95 percent of a company’s foreign receivables are covered for nonpayment due to commercial (e.g., bankruptcy) or political (e.g., war, insurrection) reasons. With export credit insurance, and support from EXIM and EXIM's registered broker Meridian Finance Group, House of Cheatham is finding new customers and expanding into new markets, secure in the knowledge that the company’s financial assets are protected.
Today, nearly 38 percent of House of Cheatham revenues are derived from exports. When asked what advice he would give other small businesses about exporting, Mike Barker, House of Cheatham President and COO, says, “Definitely do it! But do it correctly and make sure you have an export compliance program in place as well.” Part of doing it correctly is insuring your foreign receivables against loss. And that is a beautiful thing.
Learn more by downloading the Guide to Export Credit Insurance and call your local EXIM representative today!
