The Advantages of Exporting on Purpose; Start your “Export Plan for Success”!

By: Karen Scuncio

For years most businesses in the U.S. would start exporting because someone from another country contacted them to buy their products. Many refer to these companies as “accidental exporters”. Now with the convenience of the internet people in other countries are able to find their desired products on-line and much easier. It no longer matters where customers lives, what language they speak or what time of day it is at their location. As a result, “accidental exporters” are more common today.

The reputation of products made in the USA is at an all-time high particularly in the emerging economies such as China, South Korea, Brazil, India, Mexico, and Poland. Further, products labeled “Made in the USA” are perceived as being high quality and of greater value when their price is converted to other currencies.

As a result of these factors, more US companies are becoming aware of the great sales opportunities around the world that can enable solid business growth in the future. However, these first-time international sales opportunities typically can be accompanied by costly mistakes that if not mitigated, eat into the company margin.

Today, most companies are running lean so it is hard to find the time to establish an export plan. However, by focusing some quality time in developing a plan and foundation for international sales, you will avoid the costly mistakes and save both time and money. The fact is, successful business owners make a commitment to export by allocating time and money to develop and execute an effective export plan for success.

Start your Export Plan for Success!

How would you answer the following strategic questions? How closely aligned is your answers to our key to success statements?

  1. What are the company’s reasons for pursuing export markets?

Key to success: Solid objectives such as increasing sales volume or developing a broader, more stable customer base.

  1. How committed is top management to an export effort?

Key to success: Exporting should not be viewed as a quick fix for a slump in domestic sales. The company should be positioned to service export customers even when domestic sales pick up.

  1. What are management’s expectations for the export effort?
  2. How would you respond to questions about your company’s international experience?
  3. Key to success: Having a realistic expectation of how long it takes for export operations to become self-sustaining? The company’s return on investment from the export sales will be commensurate with efforts in achieving intentional exports.
  4. With what countries has business already been conducted, or from what countries have inquiries already been received?
  5. Which product lines are mentioned most often?
  6. Are any domestic customers buying the product for sale or shipment overseas? If so, to which countries?
  7. Who are the main domestic and foreign competitors?
  8. What general and specific lessons have been learned from past export attempts or experiences?

What are you/your employees’ international strengths in?

  1. What in-house international expertise does the business have (for example, international sales experience and language capabilities)?
  2. Who will be responsible for the organization and staff of your export “department”?
  3. How much senior management time (a) should be allocated and (b) could be allocated?
  4. What staffing level and structure is required to ensure that export sales are adequately serviced?

How is your business’s production capacity?

  1. How is the present capacity being used?
  2. Will filling export orders come at the expense of satisfying domestic sales?
  3. Arethere fluctuations (such as seasonality) in the annual workload? When? Why?
  4. Whatminimum export order quantity is required?
  5. Whatwould be required to design and package products specific for export?

How would you rate your company’s financial capacity?

  1. Whatamount of capital can be committed to export production and marketing?
  2. What level of operating costs can be supported by the export department?
  3. How are the initial expenses of export efforts to be allocated?

How can you avoid the 8 most common and costly export mistakes?

#1 – Selecting wrong or ineffective overseas partners

#2 – Chasing unqualified sales inquiries instead focusing on profitable market segment

#3 – Neglecting export customers when domestic business is strong.

#4 – Costly pricing errors by not understanding international transaction costs & shipping terms

#5 – Foreign product packaging requirements & regulations

#6 – Extending same Return Policy & Warranty Program as in the US

#7 – Accepting Fraudulent orders

#8 – Violating US Export Regulations

The “Export Plan for Success” provides a clear understanding of your long-term exporting objectives and ensures that your company and its management are committed to achieving them. It will mitigate the risk of making costly mistakes and increase your likelihood of success.

Orange County SBDC’s International Trade consultant can discuss your company’s export opportunities with you and help you develop and fine-tune your Export Plan for Success of action so it works for you. If you already have a solid plan but need a better understanding of the mechanics of exporting; we have our Exporting Essentials for Businesses workshop on 19 February 2015. For more information and to register please click here.

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