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Exporting - Planning the growth

For the first part of this article see Exporting - Do you have it in you?

So you have made up your mind to export. However, before you commit your resources to this project, you must first evaluate if your organization is ready to export. At the most basic level an organization is export-ready when it has:

• an exportable product
• a commitment from management to compete globally. and
• resources

Of course you have these three things, don’t you? Exporting needs a bit more planning than that. The following are some of the activities that you need to undertake prior to actually exporting your product (please note that this is not an exhaustive list):

Marketing strategy

The marketing strategy document should include what business the organization is in, macro-environment (political, social, economic and technology), target segment identification, patents and trademark protection, product or service offered to each target segment, competitors, positioning statement, financials and pricing. Secondary market research plays an important role here. You will be asked for a similar document if you seek funding for exporting activities.

Financial

Does your organization have the cash flow to undertake export opportunities? If not, what are the sources of financing available to the organization? EDC is one such organization that helps exporters with letters of credit and other such financial instruments. You would also want to find out how to hedge against foreign exchange risks. Small businesses cannot handle losses that arise if the exchange rates go to hell-in-a-hand-basket. Financial turmoil does happen and you need to protect your small business.

Operations

It is no good developing an export market if your organization does not have the capacity to meet the demands of the foreign market. Capacity can be both human resources and manufacturing output. If this is an issue, explore initiatives that improve efficiency and/or add more capacity. You also need to consider logistics and the overhead it represents: what is the lead time for accepting orders; what changes need to be made to production runs; what are the new packaging requirements; how will your goods be transported; who will transport your goods; how will you collect payments - there are some of the operational challenges. You also need to support your clients. How will you do that across time zones?

Risks

Risks vary; there are financial risks, business risks, legal risks, political risks and default risk. Identify these risks to either mitigate or accept them. Risk management forms an integral part of the export readiness evaluation process.

Network

I cannot stress the importance of this enough. Seek out organizations who have exported to your target country. Ask them about their experiences, the pitfalls to watch out for. In Nova Scotia, you can take the help of Atlantic Canada Opportunities Agency (ACOA). They have a number of mentoring programs to help small businesses. NSBI also helps businesses with their exporting activities. In many cases, you may also receive funding for some of the exporting activities.

Selling your goods to an international market can reap rich rewards and international recognition for your brand. It is risky to venture out of your home turf. But if planned and executed right, you can find exporting a very rewarding experience.

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