Tuesday, June 23, 2015

The Trade Development Junket

Here is how it works...
JEFFERSON CITY, Mo. (AP) — Jesse Stricker was wowed from the moment he stepped off an airplane in Milan, Italy. A limousine was waiting to carry him to a luxury hotel. Then it was on to a formal restaurant, where Stricker found himself seated at a table with Missouri Gov. Jay Nixon, sipping fine wine and sampling fabulous food.
And how does this gain a small business orders?  And the cost?
So far, that hasn't offset Stricker's costs for the trip, not even when reduced by the public subsidies he received. Of his $11,500 in costs, more than $3,600 was reimbursed by a Missouri Department of Economic Development program that aids small businesses, and Intek got nearly $4,900 from a federally funded grant program for businesses with declining sales or employment.
So taxpayers are footing the bill for limosine grade vacations, and bearding politicians along for the ride. And the result?
Stricker struck no immediate deals in Italy or Spain. But one German company agreed to buy nearly $1,500 of infrared heaters, leaving Stricker hopeful of more sales in the future.
Well, no wonder Intek has declining sales or employment, as this gig requires!  (Wait... what if a company has declining employment due to growth through automation?)

Why would anyone go to a trade show before having customers?  Enticed by limosine vacations and being part of a governor's posse?  And end up still paying too much for too little.  This is why I teach how to get business first, then go on an organic, productive trade show trip.

The  tax laws which already make such trips tax-exempt (or paid in pre-tax dollars) are necessary and sufficient to the task of business development.  It's a siren that kills countless small business, get a "deal" on costs, but the costs are too much for ineffective.

How many overseas exporters do you think hang out with politicians?

No, you want to develop business, you go where your buyers are, when they are there.  Doing so costs very little, and certainly needs no taxpayer bailout.  It is terrible we do it for Boeing, and terrible we do it for tiny Intek.  Time to be rid of this welfare program.

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