Entrepreneurial Goldmine

Unlike the previous six business opportunities, #4 provides significant lead-time before the opportunity can be successfully realized.  Here’s the short story:  International trading, also known as import-export businesses, was amongst the hottest commercial trends of this decade.  American companies, 95% of which are small businesses, trade in over 2.5 trillion dollars a year in merchandise.  To further compliment the international trade trend, the expansion of the Panama Canal  will double the cargo capacity of the Panama Canal, allowing for more Asian cargo to move through the Gulf of Mexico, thus bypassing the traditional California-to-Railroad route.  This increased cargo through the Gulf has port cities from Galveston to Tampa preparing to snag a piece of the action.   How does this activity translate into an opportunity for you?

(In case you missed the previous six opportunities, here they are: Ten – Entertainment, Nine – Franchises, Eight – Home Schooling, Seven – Digital Signage, Six – Baby Boomers and Five – Business Process Improvement.)

Depending on your background and interest, the expansion of the Panama Canal may provide opportunities in several areas, including and beyond an import-export business:

Import-Export Business

International trade companies can work as distributors by focusing on exporting and importing goods and services that cannot be obtained within the country (e.g., African wine and Italian clothes) or those that are cheaper when imported from other countries (e.g., Chinese electronics).   Entrepreneurs also have the option to open an export management company (EMC), where partnering with an existing corporation to market its products in a foreign country by arranging the shipping and storing of the merchandise for them without doing the actual selling.   EMCs can specialize in one industry or work with different types of import export manufacturers. It is also possible to act as a broker for a company, working on commission over the actual sales. This is a great choice for products that are guaranteed to sell because of high demand or an established brand name.

Port City Infrastructure

To accommodate the huge increase in cargo capacity in Panama, cities like New Orleans are preparing their port to benefit.  Gary LaGrange, president and CEO of the Port of New Orleans, is determined to jump into the fray. To pave the way he and the port’s board of commissioners have laid plans that could triple the container-handling capacity of local wharves.

The Port of New Orleans has planned a two phase 50 acre expansion project that will cost in excess of $500mm.  At the end of phase two, the port’s capabilities would enable the quick movement of cargo from ships to any of the six mainline railroads that connect New Orleans to mid-America and Canada. 

Expansion like this represents a huge opportunity for those in the construction and infrastructure business.

Port City Service Provider

Just as the amount of cargo coming through the Panama Canal will dramatically expand capacity, if cities like New Orleans get their fair share of the cargo, the existing service provider networks may not be able to handle all of the additional cargo or there may be a more efficient way to service the business, thus enabling an opportunity for a new kid on the block.  Most of the players in this game are older, and while they may use technology, they may not be leveraging the most efficient business processes (another business process improvement area to consider – see opportunity #5).  Do your research to determine what are the service-support businesses for this industry.

Port City Residual Effect

For the real estate developers, property speculators and current land owners, successful execution of the previous opportunities by your entrepreneurial friends could bring you some ‘Mad Money’. 

Continuing my earlier example of how the City of New Orleans is preparing for the Panama Canal expansion, there are miles of real estate in New Orleans along the river that could represent a great investment (lower 9th ward, Bywater, Uptown & the Westbank).  As described in the infrastructure component, the wharves along the river will need to be expanded and the property around the wharves will need to be converted to storage, transfer and service facilities.  Today, all of the real estate around the wharves can’t be given away.  Yes it’s risky, but if it were easy everyone would do it.  Do your home work and take calculated risks.  The other side of this coin suggests looking at other real estate in the area along the wharf.  In New Orleans, the lower ninth ward was predominately, a low income community; however with the city’s rebuilding and this expansion project, that area may well be a place for the wealthy in 10 years.  That may mean it’s a great investment now.  Again, you have to have foresight, patience and of course money to pull this off, but it’s an opportunity!

There are not many business opportunities that provide a 5 year head start before it can be executed on, but if you focus on a small niche of all the moving pieces and utilize the next 2-3 years to position yourself for the anticipated expansion, this opportunity could be meaningful to your businesses growth.

To learn more about the Panama Canal expansion project, click here.

To learn more about starting an import-export business, click here.

As always, good luck and stay tuned!

-hb