Getting started with exporting can be intimidating for small businesses that don’t know about international business. This is perfectly understandable, because what we do not experience is a mystery to us; until we can try it.
In the era of globalization, the number of companies that start exporting is growing exponentially all over the world. In addition, they are born as global SMEs. In a world where different cultures know each other and have huge connections through technology, I wouldn’t expect it to be any different. Although there are various incentives that make people export, the ultimate goal is still growth. And growth has its limits in certain area where buyers are limited. In a certain area, with a certain number of customers, growth has its limits. When this limit is reached, growth stops. Continuous growth requires expanding the market; in this case we are talking about opening to the world market.
Before starting to export, make sure you are ready and eligible to export. For this purpose I have prepared some questions on this topic for self-evaluation. The sum of positive answers to these questions will indicate whether you are ready to export or not.
Company
- Motivation
Why do you want to export?
What is the motivation that makes you decide to expand abroad?
Is it compensation for the quiet season?
Do you want to reduce the risks of staying in one market?
Is it to richer by earning foreign currency?
Do you want your brand to be known worldwide?
Whatever the reason, write it down and keep it. You must read this paper again and again. It will remind you why you started this journey and you can check yourself that you are still sticking to your original goal and continue to realize your vision. - Goals
Do you have goals?
What exactly do you want to achieve?
How do you measure performance? What metrics will you use?
Do you have a written export strategy?
How long does it take to achieve the expected results?
Share your goals and objectives with all employees and create an export strategy together, not alone.
Set SMART (Specific, Measurable, Attainable, Relevant, Time-bound) goals, delegate tasks and make sure everyone in the company knows what they are doing and most importantly. WHY they do. Thus they work together and in perfect coordination. - Commitment
Is this a common management thought or did you make it up?
What do others think about exports? Do you have everyone’s opinion?
Are you determined and ready to commit your resources and time to the process?
Wanting to achieve certain results is one thing, but only committing to a goal and making it a success will get you there. - Communication
Do you or someone in your company at least speak English well?
It doesn’t matter if you sell to Spain, Hong Kong or Qatar. You cannot speak all languages, but English will help you communicate with everyone involved in international business. Not to mention, it’s better if your employees speak the native language of your target market. For example, if you’ve entered the German-speaking market and are doing well there, you might consider hiring a native speaker. Communicating with people in their native language makes them feel closer and gives you a chance to gain their trust. - Experience
Do you have a basic knowledge of international business in terms of payment, delivery, IT Ecosystem, documentation etc.?
Even if you know exactly where to sell and have found potential buyers, you cannot export if you do not know how to export.
If you don’t know which payment method works best for you, how will you approach your potential customer?
On the other hand, it is very important to know all the details because you should know what obligations belong to you. Otherwise, you may have accidentally taken on some costs and responsibilities that you would not normally have accepted. Such mistakes can cause you to lose a buyer and, at worst, you could be sued.
There are several players to smooth the export process. These service providers are mainly customs brokers, freight forwarders and banks. These professionals make complicated procedures quite easy and it would not be wrong to say that they are your kind of export consultants. They provide you with all the information you need in international business. You just have to find a buyer and close the deal.
The next thing you should master is documentation. This is so important that if you accidentally send the wrong document, your products can get stuck in customs and at best you can be fined. As a potential exporter, it is better to work with professionals from the beginning. Depending on the importing country, preparing export documents can be simple or difficult. Therefore, first find out which documents are required in your client’s country. As you increase your activities, they become easier; it’s not rocket science at all. - Strategy
Have you identified your target market?
Have you done market research? Have you developed an export marketing strategy for each target market?
As an MSME, you must use your resources effectively and efficiently. To do this, you need a solid plan that will guide you to the right market. Each target market has its own dynamics in terms of demographics, socio-cultural factors, economics and consumer behavior. As such, they require thorough market research and tailored market entries and marketing strategies. - Financing
Have you reserved enough sources to support your export strategy?
Does your business have a stable and positive cash flow?
Unlike domestic sales, exporting can be expensive. Until your brand is recognized in you - Competition
Who are your competitors?
Domestic sale or export abroad; in business, monitoring your competitors is essential. Identify your competitors and what market they are in; their sales and promotional activities will provide you with valuable information. Most importantly, you can review and develop your strategy and tactics by looking at their mistakes and achievements. Today, there are many online tools and sources to track what your competitors are doing.
Product
- Capacity
Does your company have enough production capacity to meet the demands?
In addition to defining your target market, targeting the right potential customers is also important. You cannot attract the whole industry because you have production capacity, limited labor and limited technology. Therefore, it is best to narrow your focus and target only buyers whose requirements you can meet. - IP
Does your product have both domestic and foreign intellectual property protection?
Owning intellectual property rights is crucial for two reasons: - You protect your intellectual property rights (trademarks, copyrights and patents) in the target markets you enter and have competitive advantages of differentiation.
- When you request ownership, you will find out if you can own the IP address of your product/service in your target market. If your request is rejected because it is already owned, you will be notified immediately and appropriate precautions will be taken. Whether you try other markets or change your strategy.
- Changes
Can you change the packaging, components, ingredients, materials and functions of the product to meet foreign import regulations and customer expectations?
You can make a great product and it meets the needs of your existing customers. However, due to cultural and geographic differences, this may not be recommended for your target market and you may need to make some adjustments.
Second, current products may not conform to the target country’s regulations. In order to sell your products, you must modify them and conform them to standards. - Advantage
What competitive advantages does your product have compared to competitors’ products on the market?
What sets your product apart from others?
How to withstand the competition and attract the attention of buyers?
Without a differentiation strategy, your product will look like the others. And they maintain their market share because buyers see no reason to leave their current suppliers. Differentiating prices, operations, warranty, after-sales service or design would be effective in getting their attention.
Give them a reason! - Compliance
Do you have the certificates, laboratory analysis report, permits, tracking system or other proof of compliance required in the destination country?
Does your product comply with the target market’s trade and safety regulations, such as ITAR compliance and CE marking?
In addition to observing the rules of destination countries, various export control laws published by the government must also be followed. - Maintenance and support
Do you offer an installation service in the destination country (if it is a product that needs installation)?
Do you offer special training for the use and maintenance of the product (machine, software, hardware, digital device, etc.)?
Do you offer on-site technical support or maintenance?
On-site service and support can be expensive depending on the proximity of the country. Therefore, you must first define your service and support policy for each target country and include it in your financial plan. This way you will know exactly how much each market is paying.