So You're Committed to Exporting? Here Are the Resources You'll Need
By Dave Archer | September 30, 2008
In our last issue we talked about understanding the reasons that underpin your decision and commitment to exporting (or import, or do some kind of business internationally in today’s global economy), which include:
- Potential new sales and profitability
- Reduce unit costs of production through economies of scale
- Exposure to the way your industry works in other countries
- Gain knowledge and experience that makes you stronger
- Fun and excitement in dealing with other cultures and business environments
- Plus, it's tax deductible!
- A good product or service. And just because it's good at home doesn't necessarily mean it will sell in a different market. You will need to find out:
- How your offering stacks up against those already available in your target market;
- How well it fits with prevailing buying preferences in the target market;
- What will need to be done to either modify your product / service to fit the market, or to create awareness of
- your unique advantages in order to attract the attention of customers.
- Reasonable and clearly stated objectives. The old saying that "you need a map to know where you're going" applies here. Some of the questions you need to ask yourself include:
- What level of sales do I need to break even?
- What level of profitability do I consider acceptable?
- What risks exist, and how can I manage them?
- Exactly what is the process for developing and implementing a successful export strategy and plan?
- Resources. Simply wanting to expand internationally takes more than good intentions. You will need resources that are readily available as you develop and implement your international business plan. Here's a summary of what you'll need:
- Management commitment. If the chief decision maker does not buy in to tackling new business opportunities in foreign markets, you are doomed to failure. Management must consider international business to be part of the corporate strategy, not a sideline activity to pick off a few easy orders, because international business takes time, money, and effort - and if the top person thinks that in-house resources would be better spent elsewhere, international initiatives will "run out of fuel" sooner or later.
- Financial capacity. Doing business internationally is not free. However, properly planned and executed, it is possible to minimize the expenditure of time and money until you have confirmed with reasonable certainty that you have a good probability of success - before traveling anywhere. Companies should ensure that they have sufficient funds to mount a sustained effort when going international. How much? Well, it's possible to rent a 3m x 3m booth at most trade shows for around $3,000. Factoring in banners, brochures, and travel expenses, $10,000 will generate a fistful of sales leads and a ton of in-market exposure pretty well anywhere in the world - and then you'll know for sure if you should be in that market, and what you'll need to do to be successful.
- Personnel. Are the right people available to get the job done? Are there in-house or outsourced people with time available who can deal with language barriers, develop marketing materials, do market research, and undertake direct communications with targeted customers and distribution channel partners?