Why grow your business through exporting?
- Exporting is a great way to expand your business and if done properly, can significantly increase your profitability.
- Getting the right balance between international and domestic trade can protect your business if there is a downturn in one of your markets.
- Exporting will also expose you to new ideas, marketing techniques and ways of competing that you wouldn't generally experience at a local or national level.
- The challenges and victories you experience through exporting to overseas markets will help develop your skills and ability to compete more robustly in your domestic market.
How to start exporting?
Success in exporting doesn't happen over night or by accident – it needs careful preparation, planning and commitment.
Getting your export business off the ground can be challenging and tricky so don't hesitate to ask for help.
Before you think about exporting it's wise to conquer your domestic market. The most successful exporters are well established and have a strong customer base at home.
Once you've established a strong domestic presence it's time to learn the basics of exporting. There are many new terms and concepts you'll need to understand.
What are the different types of exports?
- Off-shore Sales
You deal directly with an importer in the target market.
- In-country Business Ownership
An Australian business in association with a local business may establish a thrird party business entity to produce and distribute in the target market.
- The transfer of Intellectual Capital
The export potential may lie in the intellectual property associated with the development of a good or service (It is not always necessary for a product to be shipped overseas).
- Tendering for Overseas Business
By tendering for an overseas contract you enter a bid for a defined project.
What are the benefits and risks involved?
Benefits of taking your business overseas
- Expands your business and spreads your risks;
- Reduces dependence on the local market;
- Uses excess production capacity;
- Buffers against seasonal demand; and
- Broadens your skill base, management practices, marketing techniques, and ways of competing.
Risks of taking your business overseas
- Political risk - instability may result in default or blockage of payment or confiscation of property.
- Legal risk - their legislation will affect all aspects of your business transactions.
- Financing risk
- Credit risk - whether the buyer will be able to pay.
- Transfer risk - any economic, political or government restrictions.
- Exchange risk - fluctuations in exchange rates.
- Transport risk - damage, loss and theft.
- Regulations and quarantine requirements - will vary between countries
What is an export strategy?
Your strategy should identify your export aims and the resources you need to achieve them. You should:
- analyse your business, the export environment, your product and service offerings and potential markets; and
- develop plans to implement your strategies and ways to evaluate their success.
It is essential to develop an export strategy before launching into an overseas market.
How important is market research?
Market research is about finding out what drives a market and how to access it. It will be a vital part of your exporting success.
In researching your export markets you'll need to find out about import duties, distribution channels, market size and growth, insurance and finance, documentation and freight and logistics. Completing market research will help you determine:
- where you should export to;
- your product's suitability for that market; and
- any requirements you must meet in order for your product to gain entry.
How to know when you are ready to export?
There are numerous factors you will need to consider before you export your product. Some of these factors include time, money, knowledge, experience, capacity, employment, training, competition, price, quality and uniqueness.