New nonprofit aims to help South Dakota businesses sell overseas
A new statewide nonprofit group called South Dakota Trade hopes to make it easier for other Rushmore State businesses to do business with international markets and generate new revenues and jobs.
TEA, S.D. — Alisa Turner can readily remember the trepidation she felt a decade ago when her company made its first international sale to a Cabela’s retail store in Canada.
Turner is a co-owner and CEO of Ruff Land Kennels in Tea, which makes industry-leading, one-piece molded plastic kennels.
At the time, the company wanted to build on its domestic business and expand beyond the border. Turner laughs about the process now but recalls how nerve-wracking it was. She and co-owner Lyle Van Kalsbeek paused before signing the documents to enter international trade relations with America’s neighbor to the north.
“Lyle said to me, ‘You better hope you have that right, because you’re signing that and it’s a federal offense punishable by jail time if anything is wrong,’” Turner recalled. “I didn’t sleep for weeks hoping it would cross the border – and that I wouldn’t go to prison.”
Turner, Van Kalsbeek and third co-owner Doug Sangl have since become relative experts at selling their kennels and other pet-carrying accessories overseas. Their continued foray into international trade is one driver of a recent growth spurt that has seen Ruff Land’s annual revenues climb from $11 million in 2021 to $16 million in 2022 to an expected $23 million in 2023.
The team broke into the international market on their own, mostly through resourcefulness, dedication and a large dose of trial and error.
Starting this week, a new statewide nonprofit group called South Dakota Trade hopes it can make it far easier for other Rushmore State businesses to do business with international markets and generate new revenues and jobs along the way.
The new public-private nonprofit trade association will be funded and supported by the Governor’s Office of Economic Development and through association members and other South Dakota entities already engaged in business development.
The group’s staff of three full-time and two part-time employees will cooperate with numerous partners inside and outside state government to develop a roadmap for both farm and non-farm businesses to expand into foreign markets.
Luke Lindberg, president and CEO, said the group will use a wide range of existing resources and create new procedures to support South Dakota businesses on two basic levels -- finding new markets and making it easier to sell into them.
“That’s really our desire – to build that culture of international trade, and get into new business or market segments that haven’t thought about this in a while — or ever,” he said.
The state and other industry groups, such as Elevate Rapid City, have done a good job of promoting international trade in South Dakota, especially in the agricultural industry, Lindberg said. But the state has fallen behind others in the level of efforts made and number of resources available to help businesses expand into domestic markets, he said.
“If you look at the non-ag data, our exports have been largely flatlined over the last decade. … We have not seen a growth in real dollars particularly and maybe even negative growth in international exports in South Dakota,” said Lindberg, recently a top official at the Export-Import Bank of the United States who is also the son-in-law of U.S. Sen. John Thune, R-South Dakota.
According to data supplied by the trade group, South Dakota in 2012 had $5.3 billion in total global exports, which included $3.8 billion in agricultural sales and $1.5 billion in manufacturing sales. Those annual figures remained flat and even fell during 2015-2019 but have risen to $6.7 billion total in 2021.
Food and kindred products were the largest export category in manufacturing with $680 million in sales in 2021, while soybeans were the top agricultural export product with $1.3 billion in sales in 2021.
Recent surveys have shown that more than 40% of American small businesses have the opportunity at hand to expand into overseas markets, Lindberg said. Other data show that about 95% of global market opportunities exist outside the U.S., he said.
One immediate goal of the new trade group will be to target 20 South Dakota businesses to enter into an “Export 101” course that will provide them with a blueprint to fast-track efforts to expand into foreign markets, Lindberg said.
Beyond finding new markets for their products, the group expects to provide South Dakota businesses with expertise in marketing, compliance, transportation and logistics related to international sales, Lindberg said. The group just learned it had received $175,000 in Small Business Association State Trade Expansion Program (STEP) funds, which can be used over the next 18 months to provide grants to South Dakota businesses trying to expand international sales, Lindberg said.
The North Dakota Trade Office, led by executive director Drew Combs, is largely serving as a model for what Lindberg hopes to accomplish in South Dakota.
“To a person just starting out or who’s not familiar with the global marketplace, it’s scary,” Combs said.
Though he seeks to provide opportunities for all types of businesses, Combs said any Midwestern trade agency will naturally focus on the agriculture and energy industries.
“If people can’t eat, there’s a problem,” he said. “The world is relying on this region to help feed everybody, because you can’t grow wheat in the desert or the jungle.”
While foreign sales still make up only 3% of Ruff Land’s annual sales, expanding into overseas markets has been as invigorating as it has been challenging, Turner said.
In March, the federal Small Business Administration named Ruff Land the 2023 Small Business Exporter of the Year in South Dakota.
“Each time I see a new international sale from our website, I just jump up and down,” said Turner. “I want everybody to have the opportunity to have one of our kennels and to have safety for their pets, no matter where in the world they live.”
— This article was produced by South Dakota News Watch, a non-profit journalism organization located online at sdnewswatch.org.