If you have already established a strong base of local or national product sales, you can explore exporting as a way to reduce seasonable changes in demand, meet your full production capacity, grow your reputation or outpace domestic competitors. Exporting creates an independent revenue stream which lowers your exposure to domestic market risks and insulates you from them, while allowing you to capitalise on new and emerging markets. Oftentimes it is possible to find significant opportunities due to unequal access to skills, resources or labour between your home country and the importing country.
Is my business ready to consider exporting?
Unlike import businesses, export businesses are almost always established. There are exceptions, but the majority of businesses have gone a long way in proving their product and refining their businesses processes to successfully deliver to the market within their own country first. From this position, they are able to utilise their cashflow and capital to move into new markets and seize opportunities. New businesses often are unable to overcome the barriers to entering the export industry and lack the experience and skills to manage international distribution effectively.
The following a strong signs that your business may be ready to export:
- Strong management systems and a track record of effective local distribution
- Strong domestic sales
- Ample resources and healthy cashflow
- A product which is export appropriate
Putting together an exporting strategy
As with almost all forms of business strategy, crafting a plan for exporting requires a huge amount of research and analysis. Creative and critical thinking has to be applied to find new markets for existing products or innovate ways to alter products to meet the demands of new demographics. There are hundreds of countries you could feasibly export your products to, but not all will have markets significant enough to justify the expense, and even fewer will grant you a competitive advantage over domestic alternatives. Putting together an export strategy requires:
- Identifying potential markets
- Undertaking market research and analysis to understand those markets fully
- Outlining expenses comprehensively
- Making a detailed cost/benefit analysis
- Researching and understanding foreign regulation
- Detailing the distribution chain
- Designing businesses processes
Putting an exporting strategy into action
Once a comprehensive exporting strategy is complete, and the plan appears to be viable and profitable, it will need to become part of your business activities. This may require negotiating with logistics and storage companies both home and abroad and training staff to handle new business processes. It is vital during this stage to keep the export strategy updated with all new developments and any deviations in terms, timings or costs to ensure that all of your assumptions are reality tested. Ideally, costs and revenues will be accurately predicted and implementation of your exporting strategy will move forward smoothly.
Any business looking to export their products must speak at length with their accountant and their lawyer to ensure that both the financial and legal implications are thoroughly understood. Seeking advice from a business coach who has experience setting up an exporting business successfully is also highly recommended.