Step by step process to increase chances of success
Not only can exporting increase sales and profits, but you'll boost brand awareness on an international level and open doors for growth in even more markets.
Exporting can help your business grow and prosper. It can also improve your competitiveness by exposing you and your staff to new ideas and demands from overseas customers. Plus, there’s the thrill of knowing that your business can compete against the best in the world.
To export successfully you need to be committed and prioritize planning. Management commitment, effort and attitude are crucial to exporting and building effective relationships. Planning is an essential step before you start any new business venture.
Successful exporters are those who’ve taken the time to learn about the new markets, the risks involved and the guidelines to follow.
Financial feasibility
Undertake a financial analysis of your export opportunity sooner rather than later. Any export opportunity needs to generate enough profit to cover all of your costs and reward you for the risk you’ve taken.
Success doesn’t usually happen immediately so you may have to take a longer-term view of your export plans.
It’s likely that:
- Exporting will cost more than you thought.
- Sales and revenue will take longer to generate than you planned.
- Customers may be slower to place orders than you expected.
To get a clear idea of where you stand financially, conduct a break-even analysis. It’s also a good idea to run a cash flow and sales forecast, so you understand where you are financially before taking the plunge. Get in contact with Comerica to run these calculations.
Start small
When you begin exporting, it’s wise to focus on one overseas market to start. Once you’ve gained experience in the international marketplace, you can expand your exporting operations, but in the beginning it’s smart to start small.
To identify your target market, gather information on:
- Your chosen country and market.
- The relevant regulations and entry requirements into your proposed market.
- Product liability in your chosen market.
- Freight considerations and required export documentation.
- How you'll be paid for your exported products or services.
- The risks involved in your chosen target country.
Begin by looking for market opportunities for your products or services where entry to the market will be easier and your potential competitive advantage can be sustained. Then draw up a list of some possible targets.
Protect your intellectual property
Don’t make the mistake of assuming your trademark, patent or industrial design protection in the U.S. also protects you in foreign markets. Intellectual Property (IP) rights are often territorial rights and don’t necessarily carry from country to country.
Your worst-case scenario is entering a marketplace with unique products or services only to find that a competitor starts copying you. If your competitor is large, then the damage will often have been done before you can react, even if you have some intellectual property protection in place.
Potential customers or distributors will want to see that you’ve secured IP protection in their markets as it can:
- Create significant barriers to competitors.
- Build credibility and add value.
- Help prevent other businesses from copying your goods or services.
The World Intellectual Property Office® (WIPO) has produced a range of information covering the various IP issues that you'll have to consider when exporting.
Learn about cultural differences
You’re potentially dealing with a different market that has different rules. It’s important to learn about them, not only to avoid giving offense but to determine if your product would be welcomed into that market.
Business practices and cultural customs vary from country to country. To make a good impression and avoid the risk of offending people, always research the cultural norms and accepted business practices before you leave home.
If English isn’t the first language in the country you’re visiting, consider learning some simple greetings and hiring a translator.
You'll also need to take into account the personalities of the individuals or groups you’re trying to influence. You may need to identify the decision-maker amongst a negotiating group, and in some cultures this may not always be obvious.
Learn about customs, licences, permits, fees and costs
Make sure you're aware of import duties and tariffs, and any quotas that may exist. Most countries are very strict on import documents being accurate and if your paperwork isn't complete or correct, you may face delays or even seizure of your goods.
Check with the customs or border control agency in your export market to find out what documents you have to file, and take the time to fill in all the paperwork properly.
Given the complexity of export compliance, you might wish to use the services of a professional customs broker or freight forwarder.
The U.S. Government’s Export Portal by the U.S. Department of Commerce® has information about international sales and marketing, finance, logistics, regulations, licenses and possible trade problems.
Maintain your core business
Exporting for the first time is exciting. But make sure your core business doesn’t suffer as a result. Keep your domestic sales strong and ensure you’re not neglecting your customers locally.
- Ensure that you have staff that are concentrating on the domestic side of the business, while others are concentrating on the new exporting venture.
- Generate customer feedback locally to confirm that they’re not feeling neglected.
- Stay in touch with your network of business contacts at home so that you’re updated on what’s happening in your industry.
Summary
It’s unrealistic to go overseas and expect an export order in the first week. It can take years to crack an export market and it will almost certainly take longer than you think, so build this time factor into your exporting budget.
Exporting is a long-term commitment in terms of resources, time, and effort – especially in different cultures. You'll need persistence, determination and continued enthusiasm, despite possible setbacks.
Next steps
- Talk to us about funding for your exporting needs.
- Manage your global trade effectively with our documentary collections and letters of credit.
- Our foreign exchange services can help you manage currency risk exposure.