Before you start trading internationally, ask yourself whether your business is suited to it, what the impact will be on your operations, and whether you have the right skills and resources.
Many businesses will benefit from exporting their products and services, but that doesn’t mean it is right for every business and there are several important things to consider first. Answering these questions should help you decide whether exporting is right for your business.
1) Have you done a business plan?
This is the first step in any new business venture, and will help you answer several of the other questions.
2) Do you have suitable products or services to sell internationally?
Certain products and services are ideally suited to an export strategy, including:
• technology, such as software and communications solutions
• engineering and manufacturing products and services, including automotive and textiles
• specialist products, such as food and drink
• scientific knowledge and expertise, such as healthcare and medical equipment
Products with a high transport cost as a proportion of the total price are unlikely to be suitable, especially if they are readily available locally.
3) Is there both a good supply chain and a ready demand for these products abroad?
If you can’t get products transported quickly, you won’t be able to fulfil customer orders on time, which will give your company a poor reputation. And if there is no market or limited demand, your exporting operations may be a waste of your time.
4) How easy is it to package and deliver the product, and how much will it all cost?
Remember to factor in your time, including restructuring your operations, and the cost of using partner companies, marketing agents and implementing new distribution methods. What will be the impact on the competitiveness of the venture?
5) Do you have the resources and skills to get an export business up and running?
What are the gaps in your knowledge and experience, and how easily can you fill them? Do you know anyone who can join you in the business who has the necessary abilities?
You will need finance to pay for the initial set-up and to promote your company in new markets. You will also need time to devote to market research, fulfilling orders, dealing with suppliers, and responding to customer queries.