There are a few things to keep in mind for expanding (or starting) exports. Here are 5 essential tips to help you grow your business on an international scale.
Do a Readiness Assessment
Are you sure your business is ready for export? Businesses are similar to markets when it comes to expansion. Export will take plenty of your money, time, and other means. What does your data say about your growth? Your reputation also plays a part. Will you be welcomed in the countries to which you want to export?
The point of a readiness review is to confirm whether you can safely expand. It mustn’t be allowed to impact your main source of income. Even if you conclude that your business is indeed export-ready, develop a solid contingency plan before you begin expanding operations.
Optimise Your Cash Flow Long-term
So you’ve done your review and your business looks ready enough to grow its export aspect. Next, you have to make sure you can sustain that long-term. You need adequate cash flow to keep your exporting operation both successful and ongoing. Between receiving payments from the customers and paying your own dues to suppliers, you might face a gap in your working capital.
You need to pay dues promptly enough that your supply chain stays robust and effective, while earning enough to offer appealing terms to your buyers without worry of loss. A good strategy is to use a credit service for your suppliers’ payments, but make sure it’s not asset-based.
Find Better Costs Management Strategies
Exporting means greater demand and greater supply costs. You will be facing this challenge whether you’re expanding an existing export venture or just starting. It might become unfeasible, if not outright impossible, to pay upfront.
Some suppliers have a trade credit option. They provide you their service and you pay them later. This is useful, but you have to account for credit repayment conditions. If they’re unfavourable, you may have to switch to a lower-quality supplier just because they will cost you less.
A better way to navigate that is a third-party trade finance solution. Simply put, these companies serve as intermediaries. They pay your suppliers upfront, and you pay them back later. There is usually a fixed time frame for making the repayment, but the interest rates are much more affordable. There’s far less risk to your business since the credit is separate from the supplier.
Polish Your Online Presence
Since you will be entering the international market, you have to appeal to the online consumer. E-Commerce is one of your biggest allies in growing your export business. Do a thorough review of your website and make sure it’s appealing and user-friendly. List the countries to which you export and specify any particular conditions that apply.
Some markets will mandate a customer service experience in the local language, so make sure your site is multi-language. Provide detailed information on costs, shipping fees, and the like. If you can list your product in local currency, that would be a great bonus.
Two final factors to consider are device-friendliness and buyer protection. Invest some effort into optimising your website for mobile. This is an inevitable requirement in the digital business age, since most shoppers nowadays view offers and make purchases from their phones.
Also, choose a recognised, trusted payment processor for your checkout options. Customer security cannot be overstated in cross-border trade. If you use a digital wallet service that requires your buyers to give their financial info directly to you, it will negatively impact your reputation and sales.
Nurture Your Network
Invest in developing and maintaining successful local relationships. They are essential to staying present and successful in a foreign market. The most common pitfall is neglecting your export-side network when your domestic market picks up. You should meet the key representatives and important customers, in person or via video, at least once in a while.
Depending on the nature of your product or service, look for appropriate partners in the target country. Especially focus on that in the early stage of your export growth. These partners could be wholesalers, distributors, selling agents, etc. See what expertise would be the most beneficial to you in the locale, and focus on finding successful partners in those fields.
In summary, make sure that your business is stable enough for export growth. Optimise your online presence and finance management, and don’t neglect your local connections.
Written by Mike Johnston