Posts Tagged ‘Export’

In March 2010, President Barack Obama launched a new initiative in an effort to promote small business exporting: stimulate the economy and create much needed jobs. This initiative is called The Obama National Export Initiative: Small Business Exports. If it is successful, we will be seeing many small businesses branching out into the international market, stimulating the economy and producing jobs that range from administrative to warehouse support.

According to the official bill from the White House website, the initiative was promoted by the recent economic and financial crisis. As we all know, millions of people the world over lost their jobs and the current economy worldwide is still very slow in bouncing back. It is the hopes of President Obama that the bill will help stimulate the economy enough to produce new jobs so that those citizens who are underemployed or simply unemployed can return to the work force. It is also hoped that the initiative will work towards stabilizing the American economy with the international economy following not far behind.

The National Export Initiative – shortened to NEI – is expected to help bolster the private sector and the ability for small businesses to engage in exporting activity. The President is confident that it will double the amount of material and product being exported from the United States over the next five years. This will be done by overcoming the many different trade barriers that are in place for small businesses. Some of the hurdles to be overcome: financing; entering the new export market; and getting government support for exporting to other countries that has not always been there before.

A cabinet has been elected by the President to oversee the initiative and the people that have been elected range from the Secretary of State to the Administrator of the Small Business Administration (SBA) to the President of the Export-Import Bank of the United States. They are charged with addressing issues such as: helping small and medium sized enterprises enter the exporting markets; offering federal assistance to these companies; leading trade missions in order to promote these small businesses from the United States; ensuring that commercial advocacy is promoted properly; increasing the line export credit available to these businesses; promotion of growth in the exporting markets; reducing trade barriers; and the overall promotion of services trade.

The first plan of this committee is scheduled to hit the President’s desk 180 days after the initiation of the executive order. The plan is to be a comprehensive one that will outline all of the issues to be addressed and how the NEI plans to carry out their goals. Small businesses in the United States seeking to break into the exporting market will be waiting patiently to see how the committee can help them and how fast the goals can be set in place.

Will The Obama National Export Initiative: Small Business Exports be successful? Even if the tiniest trade barrier is taken down through the work of the NEI it can be considered successful. And if the capital financing assistance comes through, small businesses will see themselves grow.

Small businesses that are looking for an exporting opportunity should consider the many emerging markets that are appearing all over the world. One of the biggest opportunities out there is the technology marketing. Considered one of the most popular emerging markets, technology marketing is helping bring the world a little closer together in places that one would not originally have considered.

Exporting can be difficult in the first place due to the many cultural differences and dynamics that must be taken into consideration and explored. Being ignorant of the culture you are exporting to is not a good idea. One small mistake can cost your company billions. When dealing with exporting to emerging markets, this ignorance can cause businesses to look away from the viable and profitable markets, making this miss out on sustainable business opportunities that could’ve launched them internationally.

While exporting to developing nations has, in the past, been filled with prohibitive and dubious ventures, there are many emerging markets there that offer the small business a wealth of opportunity to enjoy. These are the areas where innovative ideas, methods and technology are the most welcome. The reason for this is the lack of an established technological infrastructure. Small businesses that enter these developing economies with technology marketing fare well. They do not have to upgrade an archaic, existing infrastructure in order to do business. They are able to go in and establish the standard that is used from the present on.

Africa and South America are two areas in the world where technology marketing has provided small businesses with a wealth of opportunities. In Africa, cellular phones are the preferred mode of communication in addition to the method in which citizens of the many African nations transfer money and pay their bills. South America has welcomed and embraced Internet cafes, something that is still not accepted as the norm in the United States. These are the types of emerging markets that are starting to appear in other areas of the world and offer the expanding small business numerous opportunities for success.

Keep in mind that the lack of infrastructure can also cause issues that make it important for a small business to plan carefully. If the company is launching a service or product where some exiting technology needs to occur, the company must ensure it exists and they have access to it. Researching the technology already in place and building from it needs to be done or else the company will not be able to participate.

Additionally, careful planning must be made when it comes to social aspects, such as the cost of the service in the first place. Citizens of developing countries have little to no disposable income. What the small business provides them must be practical and affordable. If there is no need for what the small business is offering then there is no way the company will be able to convince the citizen to invest in the technology that is being put into place. Ensuring there is a need and an ability to pay for it should be one of the first research goals for any exporting business.

Many small businesses have discovered that exporting to countries overseas is a lucrative business opportunity. However, when they sit down and develop their operating plan they are faced with the dilemma of what type of exporting to engage in. Franchising is a very popular business venture both on the domestic front and internationally. However, it is more difficult to franchise a business internationally than it is domestically. There are some key differences between the two that every business owner needs to be aware of, especially if they are trying to get their small business exporting division off the ground.

Franchising has long been a business that has proven to be effective and profitable on both sides of the fence. Domestic franchising is considerably easier, however, because all of the resources needed for it are within a reasonable distance of one another. International franchising, on the other hand, requires a great more patience, expertise, and resources, especially when dealing with a foreign culture that may or may not have the additional problem of a language barrier.

Does this mean small businesses should skip franchising as a way to break into the exporting market? No. It does mean that small business owners will need to be more on the ball when it comes to making sound financial business decisions.

There are three main issues each international franchiser needs to be aware of. Let’s take a look at them:

Issue #1: The risk involved

• There is risk involved in any business venture, but when it comes to international franchising they tend to be greater. Most small business owners suddenly find themselves working outside their comfort zone in dealing with product issues as well as staff. They are required to deal with markets that are unfamiliar to them both culturally and professionally and they must be prepared to deal with the unknowns of the business. Franchisers are required on the international level to deal with partners that are from the country they are setting up in which requires a great deal of research in order to find ones that are reliable. While using a partner with international experience is a plus, international franchising is still filled with risks.

Issue #2: The culture

• Research is imperative in any exporting operation, especially when you are not familiar with the culture you want to set your franchise in. Exporters need to educate themselves on the culture their franchise will be in, and it is a good idea to seek out indigenous partners and advisors who can aid them in understanding the myriad issues they will face during the first few years of business overseas.

Issue #3: Adapting to the international environ

• Not every franchise will work in the original format. For example, if the franchise is a fast food chain in India, there will need to be adaptations made to the menu. This is where many international franchisers run into problems. The franchise has to be adaptable otherwise it is not going to succeed in the international environ. International franchise owners must be prepared to adapt.

If you’re a small business owner you may have considered looking into exporting your goods and services overseas. Exporting is a billion dollar business – when it is done properly. As a small business you will have to rely on the help of a professional exporter to help you get your business up and running. Setting this up is a daunting prospect to say the least, but it can be done and you can turn a nice profit from an exporting business.

The biggest problem with turning your company into an exporter is understanding where to start. It is a very detailed business that requires patience and a lot of hard work to get off the ground. When you have a successful exporting business in place, you could earn a profit of 10% for every transaction that you make. While the process is considerably more complicated and detailed than what we present here, this quick guide will give you an idea of what you need to do to get started.

• In order to be successful in exporting you need to make contacts with manufacturers and distributors overseas that want to trade with you. The best way to do this is to make a list of everyone you know outside of your home country and asking them to aid you in finding partner companies. If you do not know anyone overseas, contact the foreign embassy of the country you want to export to and ask to speak with whoever is in charge of their global trade initiative.

• Once you have made your initial contact start researching the country you want to export to. You need to identify the market niche you are interested in exporting to and research the popular trends that are sweeping the country. This will give you a good look at the viability of the market you are interested in. Make sure you also research aspects of exporting that include any restrictions that are in place, tariffs that may need to be paid and any trade barriers you will have to overcome.

• After you have prepared all of your research and targeted the market you want to import to you can start contacting the list of people you made who could be interested in working with you to build your exporting business. Take your time talking to these people and get to know them well so that you are confident they are the right fit for your business and will make a viable selling partner. At this point you can put into place deals that are agreeable to both of you that include prices charged, the amount of goods to be delivered, distribution to the customers, letters of credits and shipping agreements.

• With an agreement in hand you will need to find a competent exporter to partner with in order to get your goods delivered to your overseas partner overseeing the selling and distribution of your exporting division. Research is key here and most exporters will be able to explain the intricacies of the business to you in order to develop a good working relationship that ensures your products are delivered on time.

Here are 5 helpful ideas on finding customers, appointing agents, and delivering your products to export markets:

Tip No 1 – Small can be good.

• It is the dream of most exporters to move into a new market and work with the biggest players in that market in a specific industry. But the big players usually have a multitude of brands, are aggressive in negotiating price and demand support incentives that eat further into your profits. Now if you can get on board with a mega company, and negotiate a profitable price structure – GREAT! But a small company can often be hungrier for brands, and can offer focus that is fantastic. I appointed a small company to distribute some electronic products in Norway. It was almost a start-up company but the owner and his team were well funded and needed a break to grow. The first six months were tough, but after that, this small company exceeded all our expectations. So, when looking for a partner in an export market – don’t dismiss the little guys.

Tip No 2 – Beware of local costs.

• Getting your goods into a market can be a minefield. Electronic approvals, Food and Drug approvals, multi lingual owners’ manuals, costs of landing and warehousing goods and bribes to get your goods to your customer can all be major headaches, if you are not aware of the problems that you may encounter. One customer in Brazil advised me that he had to pay US$4,000 per container in bribes to land the goods. If he did not pay, all goods would be put in a holding pattern, including new shipments. This can go on for months or even years. Electrical approvals vary from country to country, and now even China is insisting on electrical approvals that are costly and time consuming. Get all the local knowledge you need before you do a deal.

Tip No 3 – Go there!

• Many companies often want to use the trade shows, phone, email, fax and letters to negotiate business in distant markets, but there is no substitute for getting on a plane and going to see your prospects in world markets. The travel is expensive and time consuming, but a visit to your new customer can be invaluable in understanding their business and seeing the wider opportunities in that market. You have the most experience with your product or service. Take the time to be with your customer, shake his or her hand and build a partnership that has depth, while seeing and hearing things for yourself.

Tip No 4 – Close the deal.

• Closing the deal in export is not just about getting the opening orders. It is about setting agreed targets, taking firm forward orders, agreeing on marketing and advertising that your customer will undertake, agreeing on warranty and service responsibilities and so much more. It is vital that you have a legal agreement between yourself and your export customer so that all issues are clear from day one. If things are not up to your expectations, you have a document to refer back to so you can ensure your product or service is represented in the best possible light, KGI can help you in this area with a sample agreement. A tight agreement also gives you the opportunity to move on if you wish to appoint a different distributor. In Europe, in countries like Belgium & France as an example, it can be difficult and VERY expensive to terminate a relationship unless you have a rock solid agreement that gives you detailed exit clauses.

Tip No 5 – Export packing.

• Don’t be cheap on the way your goods are packed and shipped to the customer. If you ship in full containers, there is less chance of damage, but we have seen containers where goods have been seriously damaged because the container was packed badly. If you use smaller sea freight shipments or air freight shipments – in excess of 20 different people can handle the goods between your manufacturing plant and the end user. And these freight industry people seem to like to THROW things! Pack it well – inner and outer cartons – shrink wrap on pallets and if necessary make sure all fumigation laws have been satisfied for the country where you will ship to.

If you have the right product or service, you might want to consider exporting, or in fact make a serious attempt to export. Exporting can be both a challenging task and a rewarding opportunity. If carried out with foresightedness, exporting can really be an activity worth following that’d deliberately yield you increased profits, and greater market share.

8-Impactive Ways of Exporting to Success

Here are the ways that can help you achieve success in exporting:

• Define your goals and objectives, and focus on them. Make a deliberate commitment that would otherwise give you confidence to compete internationally, and transcend national borders. Keep in mind that exporting is an activity that takes time and energy, and if you have no long term and short term goals, you are bound to fail. Ideally speaking, your long term goals would be the ones which you wish to achieve a year from now, or most probably in future. On the other hand, your short term goals would be the ones which you wish to fulfill in 5 to 10 days or within the period of one month. You as an exporter need to carefully identify your priorities.

• Do a SWOT Analysis. The acronym SWOT expands to Strengths, Weakness, Opportunities and Threats, which are helpful in determining the strong and the weak points in your export strategy. Moreover, as a successful exporter, doing meticulous SWOT analysis is also instrumental when indicating the future opportunities or threats perceptible in the markets chosen, and what strategy should be formulated in dicey market conditions.

• Develop an Export Plan. A well researched and a detailed export plan is the secret to exporting success. A structured export plan would be your guiding light, when you make the move towards exploring foreign markets. An export plan would ideally help you to act effectively, rather than reacting to the international market challenges and risks. A well structured export plan would comprise: Company’s Description, the target market and its industry; analysis of the target market and its industry; Individual Business Objectives of your company; financial requirements and forecasts; SWOT Analysis of the competitive market and in contrast to your own etc. A workable export strategy planned by you would also help you in aligning support from financial institutions, freight forwarders, consultants, and various other strategic partners. Furthermore, in order to achieve success as a legitimate exporter, you need to think along the lines of customer profiling, sales and distribution channels; financial requirements and forecasts; and many other potential factors.

• Conduct Market Research. This would help you in taking a firm stand while you make an export marketing decision based entirely on the socio-economic, political and cultural factors. Moreover, market research saves you time, money and energy. It provides you with a holistic view about the export market you want to penetrate. There are two types of market research, such as, Secondary market research and Primary market research. Secondary market research would help you collect information from various published resources such as books, newspapers, market reports, studies, periodicals; and the Internet. Secondary market research is a cost effective and readily available means to refine your export information requirements. Primary market research on the other hand aims to make a direct link with the industry experts, customers, and other potential sources of information. Primary market research involves one-to-one interviews and consultations. An exporter should make an attempt to reach primary market, after he has become familiar with the potential markets.

• How to enter the foreign market? Now that you have done plenty of market research and developed a workable marketing strategy, it is important to see how and what market strategies would work potentially well for your target market. There are basically three go-to-market strategies. These include Direct Exporting, Indirect Exporting and Exporting through strategic partnerships. Under the direct exporting method, there’s direct marketing and selling to the client. In the Indirect exporting method, an agreement is done with an agent, distributor or a trading house for the purpose of selling the products in the target market. The third go-to-market strategy, it may be feasible to forge strategic partnerships with other companies or individuals that would harmonize your export business.

• How to get your product or service exported to the foreign market? Exporting is a dynamic activity, and every market where you intend to export, have different market regulations, which cover health, safety, security, customs and duties, packaging and labeling. It is also important that you establish an affable relationship with the freight forwarding company and a customs broker. This would help overcome the hurdles in compliance and shipping documentation.

• How to arrange the finances in exporting? Business returns are only evident if you invest your time and money. Moreover, it is also important to see that you have financial stability and secure cash flow. Therefore, as a professional exporter you should develop your financial plan so as to address the imminent cost requirements involved in exporting. The plan should also address to the immediate as well as long term budgetary needs.

• Search financing options for your Exporting Success. A good exporter is the one who materializes a workable financial plan so as to take care of the hidden costs involved in exporting. The plan would include at least a two- to three-year cash budget that would cover overhead expenses, as well as the capital budget. A capital budget is the one that helps the exporter to rightly assess the cost-benefits of the export objectives, and is also considered as an effective operating plan to make precise assessment of the expenditures involved therein.

Exporting is as professional as any other business activity. Therefore, you need to plan out things well in advance. With export professionals working round the clock at Khanstellation Group, Inc. you have the right export team and strategy working in place. Our exporting solutions also help the exporter save you money, and increase returns on investment.