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China

Entrepreneurial edge

A number of small-business owners turned to China to get their products to the U.S. market.

By KRIS HUNDLEY
Published October 3, 2005


One used to be an investment banker. Another had a business embroidering ballcaps in St. Petersburg. A third had an idea for a new kind of cake pan. The fourth had been buying small tools and cutlery from overseas factories for more than 30 years.

Now all the entrepreneurs are importing their products from China. And each is running his shoestring operation from a home base in the Tampa Bay area.

If you think multinational corporations like General Motors and Procter & Gamble are the only ones able to tap the booming Chinese market, think again. You're just as likely to find an aggressive solo operator on a trans-Pacific flight to China as you are a corporate executive. Most of the self-employed just happen to be back in coach.

While they may look like small fish at home, these business people receive a warm welcome from Chinese factories eager for foreign orders. That means Fletcher Morgan of Heartland Ventures in St. Petersburg was able to take his patent for a dome-shaped cake pan to China and return with a product that is now selling in Wal-Mart for $19.95.

It means ballcaps can be embroidered faster, better and cheaper in four factories in China than in Pinellas County. A major U.S. pizza chain is delivering its pies in insulated bags from China. And the guy who once did investment banking now imports Chinese-made lamps for Home Depot.

These businessmen have heard the criticism that Chinese imports equal U.S. job losses. But they know it is as easy to e-mail a factory in Dongguan as it is to e-mail one in Dunedin. And they believe the U.S. and Chinese economies are so intertwined, there is no turning back.

"Sometimes people don't like the fact we're joined at the hip with China," Morgan said. "But the global economy is already here."

MICHAEL TOUPS, 39

Managing partner

World Wide Partners Inc., Belleair

2004 SALES: $4-million.

NUMBER OF U.S. EMPLOYEES: Two

PRODUCTS MADE IN CHINA: Lamps, accent furniture, decorative home accessories

FIRST TRIP TO CHINA: 2000

INITIAL IMPRESSION: "I was thinking there would be more dirt roads and rice paddies, but there were miles and miles of factories. And the people were so friendly and open to doing business with Americans."

BIGGEST IMPROVEMENT IN CHINA: Better roads and Internet connectivity, and more English-speaking Chinese.

KEY TO SUCCESS: Having 60 people on staff in China.

BIGGEST MISTAKE: "We started out by not having our own staff there. The factories will tell you there is no problem, but as time goes by, it becomes a problem."

SOLUTION: Having our own quality control person at each plant.

BEST ADVICE: Go spend some time in China, get to know the factories and develop personal relationships with the people you'll be working with.

JET LAG TIP: Two Tylenol PMs, a glass of wine, then sleep on the flight.

WHY HE DOES IT: "China's still a little bit of a mystery to most people, but when you travel there, you find people are people no matter where you go."

GEORGE MITCHESON, 57

Founder, chief executive

Native Sun Sports, St. Petersburg

2004 SALES: Less than $5-million.

NUMBER OF U.S. EMPLOYEES: Five

PRODUCTS MADE IN CHINA: Embroidered ballcaps and sports promotional items

FIRST TRIP TO CHINA: 2002

INITIAL IMPRESSION: "Fascinating, incredible, really an assault on the senses."

BIGGEST IMPROVEMENT IN CHINA: Personal contacts made on the first trip paid off on the second trip, making it easier to do business.

KEY TO SUCCESS: Face-to-face trips are a clear signal you're intent on doing business.

BIGGEST MISTAKE: A shipment of 1,500 aprons that needed to be restitched because of inferior thread.

SOLUTION: When dealing with new vendors, be more critical. Do tug and wash tests on samples.

BEST ADVICE: Do your research and don't necessarily assume China is the place to go. The best place to source your products might be down the street.

JET LAG TIP: Wear noise-canceling headphones, drink lots of water and get up and walk on the plane as much as possible.

WHY HE DOES IT: "I can be sitting at home with my coffee at 4 a.m., carrying on simultaneous instant messaging on the computer with my designer in Shore Acres, my Web person in Romania and my production guy in China. The boundaries of markets have pretty much evaporated."

FLETCHER MORGAN, 55

President

Heartland Ventures, St. Petersburg

2004 SALES: $1.4-million

NUMBER OF U.S. EMPLOYEES: One

PRODUCTS MADE IN CHINA: Patented line of bakeware and cedar closet accessories

FIRST TRIP TO CHINA: 1996

FIRST IMPRESSION: "It was a different world, so much more impoverished than I anticipated. And the factories were more like little family shops."

BIGGEST IMPROVEMENT IN CHINA: The highways. "The first time I visited China, it took five hours to get to my factory. Six months later, there was a new, four-lane highway and the trip took two hours."

KEY TO SUCCESS: The eagerness of the Chinese to get foreign business and try to meet requirements about pricing and product quality.

BIGGEST MISTAKE: "The assumption that my perception of quality would be the same as theirs."

SOLUTION: Give a thorough explanation of each product, how it works and the quality level expected for each component.

BEST ADVICE: Get a patent and vigorously defend it. Your own factories will respect it, but U.S. and European competitors may not.

JET LAG TIP: Set your watch to the time at your destination and sleep on the plane. And don't overpay for business class. You get to the same place those passengers do, just 30 seconds later.

WHY HE DOES IT: "This will be China's century. Economically, politically and socially, America is still the greatest country in the world, but we can't stand still."

ORVILLE HUSEBY, MID 50S

President, chief executive

Warco/Variant Line, Palm Harbor and Minneapolis

2004 SALES: $9-million

NUMBER OF U.S. EMPLOYEES: 63 at plant in Minnesota

Products made in China: Pizza delivery bags, spatulas and ingredient scales for a major pizza chain, plus corporate promotional items

FIRST TRIP TO CHINA: 1994

FIRST IMPRESSION: "I saw people plowing fields with oxen and wondered, "Will they ever come into the 21st century?"'

BIGGEST IMPROVEMENT IN CHINA: Privatization of state-owned factories has improved the attitude of the people, the modernization of the plants and the quality of the products.

KEY TO SUCCESS: Having two Chinese agents, one fluent in Cantonese, the other in Mandarin.

BIGGEST MISTAKE: Not visiting the factories in person before placing the first orders.

SOLUTION: Visit the plants and walk the factory floor. "Owners and workers will take on a whole new view of what you're trying to accomplish and appreciate your visit."

BEST ADVICE: Treat the Chinese with the same mutual respect you'd treat anybody else with.

JET LAG TIP: Fly business class, sleep and drink lots of water on the plane, and avoid the in-flight meals.

WHY HE DOES IT: "Outsourcing has to be done by any U.S. company serious about pricing. That's where they have to be."

[Last modified October 3, 2005, 08:50:25]


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