It's an undeniable fact that entering into exports can be a great way to grow a small business, and these days, with technology and the Internet making the world a smaller place, this is hardly a big challenge for anyone. One can get a website overnight and start taking overseas orders immediately from customers sitting in another part of the world. But that's not the right way to start with exporting. Rushing into an overseas market too early without adequate preparation could lead to frustration and cash burn, and therefore, every small firm needs to put a solid plan in place before considering exports.
Due to the nature of my international trade business, I meet exporters day in and day out, and whenever I have a conversation with them, I never miss the opportunity to ask them to share their experiences. Most of them, usually the first time exporters, point out to a number of shortcomings in their preparation that include mistakes in preparing the invoice, failure to modify products to meet overseas regulations, overlooking packaging needs required to meet legal requirements and cultural preferences, failure to translate documentation into relevant languages, miscalculating the expenses, mispricing the products, and many more.
Penalties for such mistakes can be high, and therefore self assessment is a must before entering into exports. Here, I think asking a few questions to yourself can be very helpful. Is there an overseas market for your product? Is your product ready for new markets? What are the potential routes to export the products? I call them routes to market. How will your buyers pay for your goods? Is there a sound strategy in place to manage the exchange risk of trading in two or more different currencies? How long will it take to get paid? These are some of the basic questions that you need to ask and answer yourself to know whether you are export ready or not.
How tough could it be to answer these broad categories of questions! I think, not at all easy, particularly for beginners. They cover a whole range of issues and therefore require a lot of effort in terms of export planning, market research, marketing, risk evaluation and cash flow management. This is why, commitment, resources and knowledge all are critical to export success. You need to develop a sound strategy that clearly defines the export goals and then match your resources, knowledge and skills to those goals. That's the key to preparedness for exports.
Having said that, getting into export requires preparation, I don't want to dishearten aspiring exporters (we are here to help) but emphasize on the fact that exports may seem easier at the outset but it's definitely difficult to master the art. Starting hurriedly and without a plan, you may succeed once or twice, but further to that it's not likely to go as smoothly. So prepare hard -- don't just depend on browsing the net, but also go through some guidebooks, approach trade bodies and export councils for advice and information, attend seminars and training sessions, and if you feel it's necessary, don't hesitate to speak to a consultant for guidance. Take exports seriously, prepare thoroughly before you begin, and then act. Success will follow.
Until the next time...
George.
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