While the U.S. is a huge market in itself, two-thirds of the world’s purchasing power exists offshore in foreign countries. This represents a big opportunity for small businesses to expand and grow. But, as with all growth strategies, knowing when to make that leap into new markets isn’t quite so easy, especially when faced with the unknowns of cross-border selling and a potential maze of regulations.
That being said, there are certain signs and characteristics that indicate that a business is ready to export. Let’s take a look:
Can You Make the Commitment?
Any expansion strategy requires that all stakeholders are on-board and are clear about the level of scale required to support exporting. Staff must be dedicated to support the effort –- this includes everything from logistics to accounting to marketing.
Financial resources will also need to be allocated to support international travel to trade shows and to meet in-country buyers and distributors. Processes, systems and resources must also be put in place to respond to international inquiries — this includes your website, email, phone calls, etc.
Got a Plan?
A shotgun approach to exporting is unwise. Small businesses need an international marketing plan with clear goals, strategies and target markets.
Take, for example, Bassetts Ice Cream, winner of the 2013 SBA and Visa export video contest. The Philadelphia-based company has been making and selling ice cream for over 150 years and now exports its products to China. Without a plan and support from external resources, they would never have been able to pull off their incredible exporting success story.
Bassett’s’ president, Michael Strange, says:
“If someone had said to me five years ago that 20 percent of my business today would be exporting ice cream to China I would have said you’ve got to be crazy. While the opportunity was there, I had so many questions, I needed a guide or at the very least a road map.”
Watch the video to learn how Strange’s team built that road map.
Exporting plans should also take into account global marketing. For example, your website needs to emphasize your ability to fulfill international orders and provide a translation mechanism. In-country advertising and packaging that addresses cultural differences also comes into play.
Don’t forget protecting your intellectual property — does your company have adequate knowledge about how to protect your ideas and products against patent-infringement, and so on?
Is Your Product Ready?
This is often the starting point for most exporting. If a product has succeeded in the domestic market, could there be demand for it internationally?
What potential does your product have to sell in a particular international market? Who’s the competition? Are there any barriers to trade? Export.gov’s market research guides and tools like Trade Stats, can help you take a step-by-step, structured approach to doing your research and identifying potential target markets.
From a resource standpoint, does your business have the ability to modify its product/service and translate marketing materials to meet market requirements?
What about capacity? Can you scale to meet the demand for export orders?
Do You Understand Export Mechanics?
This is where things can get confusing. Cross-border selling is laden with regulations, as well as logistic and tax considerations.
Exporters need to understand how their products will ship. What export documents are involved and how will you manage freight forwarders and carriers.
Export financing and payment options also require specialist know-how. And then there’s the business of dealing with U.S. Export Controls as well as foreign legal and regulatory requirements for your product.
Don’t be Put Off – Help is at Hand
Sounds like a lot to take on, but don’t be put off. Most small businesses can only check off one or two items on this list from the get go –- typically the commitment and the market opportunity. The good news is that there’s help with the rest of it. Experts can help with everything from exporting mechanics to helping you get your product ready to market overseas, not to mention the financing you need to fund your growth.
The U.S. government is a huge proponent of small business exporting and offers training, resources and financial resources. Start by checking out the exporting resources on SBA.gov, Export.gov, and BusinessUSA.gov. You can also get help from the experts at U.S. Export Assistance Centers. Located across the country and focused exclusively on small and medium businesses, these one-stop-shop centers bring together exporting experts from across various government agencies as well as the private sector.
Exporting Photo via Shutterstock