Ian Levitt left a career in international corporate business to start his automotive parts distribution business named Qualcast in Nashville, TN in 1997. He is still a small business, but has had great success importing and exporting around the world.
Ian highlighted three of the more difficult challenges he has faced as a small business owner dealing with the international market:
– Credit risk. As he began to do business in China, he faced the need to finance large purchases by Chinese customers. He would have to carry their debt until the parts arrived and were weighed and checked. This could mean several weeks to months. Unfortunately, banks view lines of credit on such accounts receivable as too risky to finance even if only for a few weeks. He was able to speed the process along, but had to tie up all of his cash on a single order.
– Currency issues. More of his European customers now do business in Euros rather than dollars. This opened him up to significant currency exchange risks. Even as a small business person, he was able to buy a large stake in Euros for twelve months to stabilize his exchange rate.
– Credit card fraud. Sadly, credit card fraud is a major issue for international trade, and many clients insist on using credit cards for purchases. Ian said that he can no longer accept credit card orders from his international clients due to the high rate of fraud.
In the middle of our discussions about teaching entrepreneurship and shaping public policy to meet their needs, it was refreshing to hear about the real issues faced by a small business in the international arena from someone in the trenches.
Ian Levitt is active in the Nashville business community helping to support other entrepreneurs interested in the international arena.
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