Ready to export?

Many small business' are taking the exporting challenge and expanding their business internationally but before you decide to get in on the action, make sure you are 'export ready'.

Exporting is not just for big business. In fact, exporting can be a great way for smaller operators to expand their customer base internationally and figures from the Australian Bureau of Statistics (April 2010) reveal that many small firms are getting in on the action. Approximately 38 percent of goods exporters in Australia are small businesses.

One of the key benefits of exporting is that if done well, it can act to decrease a firm's reliance on a single revenue source. This in turn will help to protect a business if there is a downturn in the industry or local economy.

However, it is also important to recognise that most expansion plans have an element of risk and exporting is no different. It can be a difficult road, particularly if you haven't done your homework. If exporting is on your agenda, you need to take some time to work out if you are 'export ready' versus 'export willing'. Don't be dejected if these questions force you to reconsider - it just means you need to strengthen some elements of you business before stepping into the export arena.

 

Is your business ready?

First things first, you need to determine if your business is ready to start exporting. Consider these questions:

  • Commitment - Does your business have the time and resources required to break into a new market? Are your staff also willing to support the change?
  • Product/service - Do you have a unique product or service which will be successful internationally? Will you need to make adjustments to accommodate international markets or laws?
  • Marketing - How successful is your marketing activity on home soil and how will it compare internationally? Will you need to overhaul your existing marketing activities or could you translate existing marketing material?
  • Management - Is your management team capable of overseeing export activity or will new skills be required?
  • Production - Does your business have surplus stock or the capacity to increase production to meet export requirements?
  • Finance - Is your business in a financial position to afford initial set-up costs like advertising, training, market visits etc?

Your readiness to export will depend on your answer to these tough questions. Keep in mind that exporting victory requires planning and a lot of work so you need to make sure your business is in a solid position to give you the best chance of success.

Now you have established if your business is stable enough to take on the exporting challenge, there are other issues to think about. Take a moment to consider the factors required for success.

What are some determining factors for success?

To increase the chance of success in exporting, take some time to review a number of internal and external factors as well as your products and services.

  • Internal - Have an objective look at your business structure, processes and strategies so you can pinpoint areas of weakness and strength. Assess whether your weaknesses will negatively impact any exporting activities and how your strengths may help. Also consider your motives for exporting; will it really be beneficial for your business?
  • External - Identify any regulations and prohibitions relating to exporting from Australia and ascertain the country or countries which you want to target. Focus on a region which will provide you with the best prospects. Also determine if your business will need to modify pre or after sales support to meet local expectations.
  • Products and services - You need to decide if you are going to export your current product/service offering, modify existing offerings to suit the international market or develop something specifically for export. Take into account the expectations of your export market in regards to standards, brand names, quality, appearance/packaging and usage.

If you feel you can conquer these factors, its time to start looking more closely at your target market as it is imperative you have a good grasp of influencing factors in your country of choice.

Have you researched the market?

You have already identified the general market you wish to target and now it is time to undertake some thorough market analysis and research so you know exactly what you are dealing with.

  • Analysis - Identify your target market by analysing its potential for your product. As a first time exporter, it would be worthwhile focusing on a small area or limited number of countries and expanding from there. You need to start slowly so don't set your sights too high to begin with. Also make yourself aware of any strengths and weaknesses in the potential market so you can develop your export strategy around this.
  • Research - Market research is a critical element in setting your export strategy and should provide you with a more in-depth idea of the market and your chances of success. Aim to get a good understanding of the market size/growth, competitive environment and the availability of service providers, such as agents or distributors. Start at your desk and use readily available sources to compile general information on the business conditions of the targeted country. This will assist you in successfully identifying its potential and any issues relating to your market. Next, try to collect first hand information by visiting potential customers and users of your products and services. It may seem like overkill but it is ultimately the best way to gather a fully understanding of the issues of your export market.

Also, be aware of other influencing factors in your country/countries of choice. Economic and political issues can have a direct impact on commercial markets so it is also important to research any risks and determine how they may impact on your exporting plans. Dun & Bradstreet has a number of international reports available to assist in gathering this information. The reports include political, economic and commercial data or analysis on the risks and opportunities of doing business in over 132 countries.

For more information or to order an international report click here >>

The government agency Austrade exists to help Australian businesses determine if exporting is suitable for their firm and to help those that decide to take on the challenge through the start-up process. If you are considering taking to the export ring, take a look at the Austrade website, www.austrade.gov.au

Want more information before you take the plunge? Read Expanding overseas - a check list for SME exporters >>  

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