Despite the doom and gloom surrounding the global and domestic economy, one area that is booming for US firms is the export sector. Described by President Obama as one of the ‘bright’ sparks in the economy, the US government is firmly committed to continued growth in the export sector.
The good news is that large corporations are not the only ones to benefit from this expanding export market; from manufacturing firms like ISOStainless.com, to the Brooklyn Brewery – which started exporting to Japan as ‘a lark’ according to a recent Wall Street Journal article. So how exactly do you start to grow even the smallest business through export?
Why Export – Beyond the Obvious
First of all it’s worth examining the benefits of exporting. In terms of expansion, selling your products or services overseas has one simple advantage; growth. We live in a global market place and a global economy – exporting allows you to simply access more customers.
Creating a balance between the home trade and overseas sales makes your company more robust and far more resistant to dips in the market wherever they occur. A downturn at home can be offset by buoyant sales elsewhere, and vice versa. Greater exposure to new ways of working, consumer demands or techniques in marketing can also result from tapping into overseas markets.
While you may think you know everything about your product’s market there may be significant new sectors that the product appeals to in non-domestic markets. Challenges are always good ways to learn and help your business become more flexible; exporting will create new challenges and opportunities which can in turn make it more robust in both overseas and domestic markets.
Growth Begins At Home
Being convinced of the many benefits of exporting may not be enough to make the enterprise successful. Export won’t happen overnight and it shouldn’t be something you rush into. The first sign that your firm is ready to begin exporting is that you have a strong presence in the domestic market and a sound customer base.
You’ll need capacity to produce the extra products or services that export will demand, and this is best achieved if you have a strong, established and reliable workforce already catering to an existing demand.
Research is also key; Boston Brewery would not, perhaps, have found success in exporting to Islamic regions (although opportunities might exist in those that have a strong tourism sector). Companies like ISOStainless would no doubt find the most likely markets for their products would exist in countries actively developing new infrastructure projects.
Understanding different markets globally, what’s happening in those countries and how your product fits into the local market is essential.
There are risks involved in developing overseas trade links that often discourage small firms from entering the market. The biggest fear amongst many is the concern over payment. As part of your research you’ll need to consider a number of other risks as well; the political stability of your market is important and needs serious consideration.
Tax and legal issues need to be explored thoroughly, too. A significant number of markets have free trade agreements, but those that don’t might be most suitable for your product. In this case understanding the financial implications of proceeding is imperative.
In addition, language and infrastructure in your chosen markets may be a significant factor; for small US firms countries in which the widespread use of English or Spanish is common make cross-border communications simpler.
Creating a viable, robust export strategy is an essential step in achieving growth through export. You should evaluate your existing business for capacity (in terms of production or delivery). Establish your competitors in any given export market – there may be less in some than in others, though balancing the risks in markets where few others are trading is important.
You should also initiate measures that can be used to implement your export strategy and – importantly – evaluate their success. Plan carefully is the rule here, and be in a position to evaluate success and deal with challenges (expected or otherwise) before you launch your products and services overseas.
With the importance of the export market growing to the US economy and responsible for creating and sustaining significant opportunities back home, there are a large number of useful tools and resources available at a federal level for firms of any size.
With limited domestic growth and job opportunities it’s likely that the President’s stated aim of doubling US export trade by 2015 will continue to be a priority – making the perfect climate for growth for businesses of any size.