Guide to start your export business

Get the basics right, grab success

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Writuparna Kakati | 20 Mar, 2008
Exporting to a overseas market is a serious undertaking. To succeed in it, you must get the basics right. The first step is to prepare an export business plan. Without proper guidance, it may be time consuming and costly. To minimize the effort, you can greatly rely upon information that is readily available online or take assistance of a professional business support organization. But that is not enough; it is your business and getting something wrong can be extremely costly to none but you. Whether formally written down or not, an international business plan is the ultimate necessity as it is the best tool to evaluate your strength to go international. If you have planned to seek financing assistance from a bank, it is better to prepare the plan in advance. Clearly state the present status, internal goals and commitment of your company and also the future objectives. After you finish the plan, get ready to take some smart steps.

Step 1: Identify your market
This is a costly and time consuming process, particularly for the small organization. But there are so many online information and business support organizations to assist. Different websites kept by various government and non-government organizations offer low-cost and easily accessible resources which can speed up foreign market research. Also try like potential customers, competitors, distributors & agents, government representatives, etc. for some useful information. Never rely upon preconceptions; market which first appears as a sure-fire success may not work properly later. Ask yourself the following questions before taking the final step to start your export operations in an overseas country-

Find out your would be competitors, their strengths and weaknesses. Does a similar product or service (you are going to sell) already exist in the market? Is the product you are going to sell has an all year round demand or a seasonal demand? Analysis all these things while researching your market.
Who would be your potential customers? Consider their age, sex, marital status, occupation, social class, lifestyle, etc. and try to find out the size of your would be customer base. Do you have existing contacts or experience in the would be market?
Analysis your target area. Is there are enough buyers? Is yes, how often they buy? How much and how often they buy? Considering all these things can help you determine your marketing strategy properly.

Step 2: Determining the most penetrable markets
Once you have completed your market research and found out a few prospective foreign markets, ask yourself the following questions-

What is the quality of your product as compared to those produced by the others available in your would be market?
Is your price is competitive? Who are going to comprise the major portion of your customer base?

Step 3: Define which market to pursue
Now you have found out which market you you should explore. Now the step is to define which market you are going to explore. Never choose too many markets. I your business is small or medium, two or three market will be more than enough. You may consider exploring one of these markets first and later the others remaining. Define which is your primary market and which is/are the secondary. Knowing all these things is necessary to determine which market is the best for you and how you should plan your market strategies according to different market needs.

Step 4: What way would be the best for market entry?
After determining the market, it is now the time to determine the way of your market entry. There are two main ways- direct export and indirect export. The first way involves selling directly to a foreign firm. In this case, you have to find out buyers by yourself and arrange everything related to shipping your products overseas. But direct exporting is no the only way to do export business. If you cannot manage all the requirements for direct exporting, try the ways for indirect export business-

Export Management Companies: EMCs usually work on a commission basis and act as 'off site' export department of your company. If your business is small then hiring an EMC is the best option to start your business in a foreign land. EMCs perform the following things-

Perform market research

Attend trade shows to promote your products or services

Access proper distributor channels Arrange export financing

Handle export logistics

Advice on legal aspects regarding various rules and regulations.

Export Trading Companies: ETCs functions just like an EMC in many ways. They act an agent between the buyer and seller, take title to your goods for export and pay you directly.

Foreign Trading Companies: Various Foreign Trading companies can also help you in your export business. Try online and you would certainly find many such companies operating in different countries.

Step 5: How to find buyers in a foreign market?
A few tips are provided below to find out more and more buyers for your overseas business-

Be a member of a reputed B2B portal: In these days, most of the buyers prefer browsing the Internet than any other media while looking for products or services. Registering your business with a reputed B2B portal like Tradeindia can help a lot to display yourself before so many buyers at the international level
Advertise in trade journal: An ad placed in a trade journal or yellow page often yields innumerable inquiries from abroad.
Pursue Trade Leads: Rather than waiting for potential foreign customers to contact you, it is better to search out companies looking for the kind of products and services you offer. A B2B portal can be most useful also in this case. Exhibit at Trade Shows: Participating in a trade show is always regarded as an effective way to promote sales.

After taking the aforesaid steps properly, you will find yourself doing business successfully in a foreign land. But your market research does not end once you successfully start your business in an overseas country. To keep your business sharp and competitive, you must continually refine your business processes. Try to acquire as much local knowledge as possible. It will help you to find out your weaknesses and to improve your business strategies.