Posts Tagged ‘small business exporting’

The biggest obstacle any company faces on a day to day basis is financing. This is especially true for small businesses. Small businesses are constantly fighting to make their way in the world and get a foothold in the domestic market. Those small businesses that have been successful fight to get a foothold in the international market as exporters. It is even more important for these businesses to be able to secure the necessary financing needed to expand overseas.

While there are many obstacles to overcome in exporting the acquiring capital to start the expansion process is the largest one. Small businesses will not find very many investors who will put up capital to finance an overseas venture. The recent credit crisis has made investors leery of shaky ventures such as exporting, and in some cases the funds are simply not available. A successful exporting business can cost a few million dollars to create and keep running, with the initial investment being the largest and most important part. It sets out the financial foundation of the company, allows the company to get established in the country it is servicing and helps build customer relations.

However, finding an investor is not always easy because of the amount of money that has to be put into place during the initial investment phase. Most small businesses are lacking in assets that can be used as collateral for a loan. This makes it hard for most small businesses to get the funds they need to open an exporting branch. There are, however, options available to the small business owner to help them get their exporting business rolling.

One option is assistance from the Small Business Administration (SBA) that can help a small business borrow the capital they need to get their exporting business started. The SBA acts as a go between for the small business and a third party lender, allowing the business to finance up to $750,000 to be used for business purposes such as expansion. This program has been popular with entrepreneurs and is one of the many options available to businesses just starting out.

OPIC (the Overseas Private Investment Corporation) is another option for small businesses looking to expand overseas. The company acts as a facilitator for small businesses that are looking to market their products internationally and have revenue of less than $250 million. OPIC will determine if these companies are eligible for a loan and they could receive anywhere from $100,000 to $250 million to start an export business. Businesses with revenue up to $35 million can receive a loan from $100,000 to $10 million to help start their exporting division.

Both of these programs are backed by the government and recognized as reliable sources of capital for expansion. However, not every company may qualify for a loan and the repayment terms may vary. If the small business is a good fit for the program, then they may be able to realize their exporting dreams quicker than they expected. Contact us today to see how we can help facilitate your capital requirement needs in a timely and cost-effective manner.

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.

Becoming a successful exporter requires more than just having a product or service you want to share with the world. It requires a lot of hard work and discipline to make the venture work. Many small businesses discover the hard way that exporting is more than just a matter of shipping things overseas. Exporting is, in a way, having a small business within a small business. In order to be successful, you need to run both businesses in tandem while still meeting the needs of your customers both at home and abroad.

New exporters make mistakes, that is true, but some mistakes are more costly than others and could seriously break the business. If you want to be successful in exporting then you need to know ahead of time what some of the most common exporting mistakes are so that you do not fall into the trap right as you get started. Here are the five most common mistakes many businesses make when they first start exporting their products and services. Pay close attention to them so that you do not fall into the same trap.

• Mistake #1: Your small business does not have an international marketing plan in place.
  If you have a marketing plan for your sales base at home, then it is important to have a marketing plan in place to sell abroad. There really is no difference in the actual selling part between the two except for the actual items or service. You need to develop a marketing plan that appeals to the customer abroad and you need to offer them the products they want, which could differ greatly from the products you are selling at home. Take the time to research what your customers overseas are looking for and develop your exporting marketing plan accordingly.

• Mistake #2: The overseas partners you are working with are inadequate.
  Once again it is important to stress that research is key to making your exporting business a success, especially when you are dealing with overseas partners. You need to make sure the companies you plan to partner with are reliable and are able to deliver your goods the way they say they will when you partner with them. If they cannot or do not deliver, you could be left with a mess on your hands.

• Mistake #3: You are not committed to the exporting cause.
  Exporting is not a way to make a quick profit. It is something that takes time. Just like building a reputation with your home clients, you need to do the same with your overseas clients. The same is true for the partnerships you develop with companies that are acting as your overseas representatives. Plan on taking your time and committing yourself and your business to exporting your goods and services. If you do, you will be successful in this aspect of your business.

• Mistake #4: You are catering to your home customers and ignoring your overseas market.
  This is the reason why you should have a good, comprehensive international marketing plan in place before you start exporting. You have to be set up to give both domestic and international customers the same attention and support. Yes, your home market is your profit base if exporting does not work out for your small business. But if you ignore your overseas market, you are going to short change yourself and people who are relying on your product.

• Mistake #5: You didn’t accommodate your oversea customers’ preferences.
  While this is less of an issue if you are exporting to a country that speaks the same language as your home market – for example, from the United States to Great Britain – you need to make sure that you cater to the preferences of your international customers. This includes modifying your product packaging to be appealing overseas, how you do business face to face to meet cultural acceptability and making sure you are selling your goods and services legally in the overseas market based on their rules. You may find it easier to change your domestic preferences as well to be successful in both markets.

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.

Welcome to our new Export blog. We hope you will enjoy my rambling & ranting on the subject of Exporting!

On this blog I will concentrate on providing insights affecting US companies in Exporting overseas.

Some of the areas will include:

• Banks, they should help you to finance business and NOT overheads. We are going to talk about Letters of Credit, Financing, and Trade Credit.

• Business Start-Up, how to run a business while you keep your job and test the water, before you jump into business and commit your savings and/or borrowed money. Do you really need a VC before you can earn yourself a good living?

• Government, why most government export assistance for small business may be a sincere offer, but in reality is nothing but hot air.

• Marketing/PR, the high tech way to create awareness for your products and services for the small budget.

• Outsourcing & Virtual Assistants, the technology driven way to timeshare professionals and keeping you overheads down.

• Freight Forwarders, moving goods from the US to their final destination overseas is one of the biggest challenges facing the exporter - I’ll share insights about the    important role of freight forwarders and review terms of sales and focus on the important documents that make up the typical export sale.

• International Markets, helping identify market segments with information about each country market and its economic environment and the potential for various products.

Let us know what you think and let’s talk EXPORT, ……SMALL BUSINESS EXPORT!