Preparing An Export Business Plan and The Benefits You May Enjoy
The first step towards a successful business has always been planning which is also the case if you are looking to stretch your business in the international scene through exporting. It is very important to realize planning is not just a one-time thing but a continuous process and planning lays the foundation for a business and provides a model with which your business can run with, which holds high the purpose and mission of your company.
It is said that over 67% of business that export do not have a business plan which is a bad idea when moving into a new market. As you may already know failing to plan in anything you do is planning to fail. When it comes to exporting to different markets, your business is open to a whole new level of challenges which if not well addressed before initiation can ruin your chances of survival in a new market.
The benefits of an export plan can be endless but the information gathered throughout the process is invaluable to your business. While you produce a plan you gain insights as to, is your business ready for the global market, you are able to conduct an industry analysis, picking products with export potential, identifying your export needs, marketing strategies, and being able to set up your export goals. What’s more to the comprehensive process of planning is you will be equip information which will guide you in making good decisions as you plan to export to new markets.
Learning about all you can get if you ever decide to export your products into a new market, it might be tempting to skip all the necessary steps which you must undertake before reaping the optimum benefits of exporting your products or services overseas. Before you go any further, it is very important to assess the current state of your business. With an assessment, you will be able to evaluate potentials and identify the gaps which will give you a clear understanding of what is needed or necessary for growing your business in the global market place.
The Importance and benefits of An Export Business Plan
It is important to understand that proper planning for exporting is what can place you on the path to success. Just by preparing a plan, you are already one step into success. Below are some benefits of preparing an export plan for your business.
An export plan will help guide the future direction of your business. Using the information gathered, you can project the possibilities of your business in the global market and predict the future for your business in the global market place.
With the proper export plan, you must have every information you need to set the pace and hit the ground running and ready to execute. You find yourself well equipped with a plan and a road map to follow. You become aware of the right steps to take and the correct buttons to press.
With a well-developed export business plan, you work on facts and reality and not on mere assumptions and guesswork. You work with facts and reality which builds confidence. With proper assessment and a realistic plan, you are already on a journey to success for your export endeavors.
When preparing an export plan you are quick to identify strengths and weaknesses of your business and of the market. When you are able to identify your strengths you take advantage of them and when it comes to your weaknesses, you are able to provide means to overcome them and remain on the right tract. It is always very important to be aware of your strengths and weaknesses rather than having no clue what they are.
With an export plan for your business, you stay focus and keep track of your export strategy. A well-developed export plan comes with goals and the best strategies to achieve them. By having a well-analyzed strategy in place, you remain focus on your goals and objectives which is very important for every business.
Putting up an export plan is very important as it allows you to identify what financing you may need in other to take your business to the world. With your plan, you can be quick to discover if your strategy requires any form of financing from your side and how you can allocate resources to meet your export requirements.
Working on an export plan can go a long way as to enhancing communication all across your organization and between your team. As you create a plan you can easily communicate with the members of your organization about the possibilities of going global by developing tactics that might best work for the organization.
Besides, developing an export plan can help in assigning responsibility for yourself and among your team responsible for the export initiative of the business. You can easily identify the right fits for the job ahead and who best can take care of certain required tasks among the organization.
Also, of prime importance, is the fact that you can easily measure your success against the goals which were developed during the creation of the export plan. With being able to measure success, you can easily evaluate your export strategy alongside with the business objectives and purpose. Above all you remain focus.
Another important benefit of having an export plan ensures a commitment to start exporting. Once you have your written plan, identify the best strategies that might work well for you, you are already committed in a way to succeed in your plan. Just by preparing a plan is already one step closer to your success.
The Process of Creating Your Export Plan
Creating an export plan does not require months and months of work as many people may think. An export plan can be a simple document that addresses your objectives and purpose which can be developed from time to time as you start exporting your products and services to the world.
In creating an export business plan, you can begin with certain key questions that can get you thinking on the best strategies to implement or to make your export decision feasible. In providing answers to these questions, you identify your strengths and weaknesses which is very important for your planning.
Some of the questions may include;
Q What problem or need does my product or service fill in the global market place? What is it that you have or in possession of that other business in the global market place don’t have? This might be a particular technology, this might be a new development in an industry, this can be a particular kind of consumer goods that sells perfectly well in your local market and you believe you can do more and remain competitive if it is taken to the global market.
Q What modifications are required in other to adapt in a foreign market? Are the modifications something you can consider? How flexible is your business to adapt in these new markets?
Q What documentation, special licenses or certificates do you need to take your products around the world? What restrictions are out there for your products or services and in what markets? What are the government requirements to obtain these documentations?
Q Do you need to re-package or re-label your products? How open are you to re-package your products? This is because in some countries, you must need to make some emphasis on your packaging or make certain changes. How does the market you are looking at approve their packaging or labeling?
Q How much will it cost you to get your products in the markets you are interested in? What are all the associated costs to get your products and services to the final consumer? What are the custom duties, VAT, tariffs associated with your products and services in the foreign market
Q What will be your pricing strategy in the new market? In line with your export objectives, which pricing strategy can best guide you towards your objectives of the market. Do you want to price reasonably low to gain some market share or you want to price as a premium due to the standards of living in the market you are looking at?
Q what modifications can be necessary for your website? Do you want to accept international orders on your website? Do you want to present your products in a more global way? How can the information on your website enhance your global brand awareness? How can you make your website more international friendly?
Q Do I need to protect my intellectual property rights? What is necessary to protect your IP rights in the markets you are looking at? Can you meet the requirements in a timely manner?
Q When are you looking for an international customer in the first place? Are you seeking to expand your market? Are you looking to avoid local competition? Are you interested in the profits you might make in the global market?
Q Do I have any previous experience with exporting? How can my experience with exporting help to make my export plan stronger and more effective?
Q Are you export ready? How much time do you need to implement? Is your production capacity ready to take more demand from the international market? Do you have the staff ready to handle the demand from international sales? Would you need more financing?
Q What will be the cost of your export effort? What are your estimated international sales for the first year? What additional expertise in international trade do you need and where can you get them? What sales channels are available for your business? How can you manage returns and warranty issues if necessary? Will you be available for trade shows?
Q what credit policies will best suit your business? Would you accept cash in advance or a letter of credits? How will you ship the products to your buyers? Will it be the responsibility of the buyer? Are there any government export assistance programs you can take advantage of? What documentation will you be needing to export your products? And what is the minimum order quantity you will be accepting?
Providing detail answers to these questions will help you create a well developed export business plan which can guide you to identify the best strategy for your export venture and a marketing plan as well.
Steps to creating your export business plan.
Many still fall short of the importance of preparing an export business plan before going global. Creating an export business plan is vital for identifying your business or company’s present status, your internal goals, and commitment. The process of creating an export business plan entails the assembling of facts, identifying potential constraints that may require more attention, setting specific goals and objectives which will be used in the feature to measure your success in the global scene.
Step one
If you already have your business and a product you want to export, then you can start with writing down your mission statement. It can be the reason why you want to go international or any motivating factor pushing you to venture in the global market. You can limit your mission statement to one paragraph or two.
Step two
Once you have a clear mission statement, you can now develop your goals and objectives for going global. It is important to make sure your goals are specific, measurable, achievable, realistic and timely. It is important to put down your goals in line with your objectives for the markets you are looking at.
Step three
Once you have all your goals mapped out and laid down, you can set a budget you would like to set aside to achieving export goals. This can be an annual budget you can let go in other to facilitate your venture in the global market. The budget set aside should be able to cover your export needs. Like traveling and attending trade shows, carrying out market research or even upgrading your website to be international friendly and to get the staff you will need.
Step four
Lay down your non-financial resources you can take advantage of at the very beginning to expand your knowledge about exporting your products to the world. Look out for any free information or free events which can help as you get started. Research the benefits your government might be offering for businesses willing to export their products. Look among your staff, individuals with some kind of information which might guide your export intensions. At this stage, you should be trying to build your internal knowledge about exporting and how it can be done for free or inexpensively.
Step five
Lookout for current trends and practices which can be used as signaling factors for the best practices for your export endeavors. It is important to check on some on the practices that your business can capitalize on or any other information you already know or something you have done before that can give you some clues to look after as you plan to export. Maybe you have been getting some few international buyers request, distributors, that you can look deep into them and understand where they were coming from and analyze how it can be improved upon.
Step six
As you put everything in place, check with your production capacity. By how much can you increase production capacity to meet your export goals? Would you require additional capital investment? You need to be sure your production can meet the global demands you are searching for in other to establish a good brand reputation. Also, what customization can be done for your business and your products? What best ways can you improve efficiencies as you increase capacity?
Step seven
At this stage, your main focus will be on the target markets and the criteria for selecting a target market. You should be looking at the opportunities each market brings and why you should venture into those markets. Look at the trade agreements between your country and such markets. Pay attention to how you can ship to these markets and the price you can best sell in these markets. Sort out best practices for the markets and how you can find distributors in the markets you are interested in. Above all, how economically and politically stable are these markets?
Step eight
Layout the risks you can encounter when exporting to a new market and how you can mitigate or the best possible ways to avoid them. A huge risk for businesses exporting their products overseas can be non-payment or probably products getting stock at customs. Put down some policies to help avoid any risks involve in your line of export business. Identify the best practices that will keep your business away from these export associated risks.
Step nine
Prepare your credit policies. Would you accept cash in advance payment methods? Will you accept credit card payments? How will you validate payment before shipping goods? What terms of trade will you offer your distributors? Will you accept a letter of credit for some orders?
Step ten
What are your return policies in case you use any kind of warranty for your products? How would you handle complaints? How would you handle replacement for lost goods or damaged goods during the transit time?
Step eleven.
At this stage you required to identify how your shipping will be done. How soon can you ship after an order has been placed? Which of your staffs will handle the shipping of your products? How will the shipping be done? Through air, land or sea? Would you be sending out samples of your products? How will you handle the process?
Step twelve
Check on the best freight forwarders you can use for your shipping. Look at what they can do your export business. Check the cost of shipping to your target markets. They can provide you with useful information about shipping to certain countries as well and documentations needed.
Step thirteen
Also, it is important to check if you would need an export license in other to ship your products over seas.
Step Fourteen
You should check if you will be needing health certificates for your products. Procuring health certificates for your goods will be very important to prove your goods are of standards. This is the case for food products, beauty products, food supplements and many more.
Step fifteen
Look into label laws in your target market and how you can modify your labeling before exporting the products overseas.
Step sixteen
Identify your products HS codes, Schedule B or HTS number. These codes are identifiable in every country in the world as it will be used to determine the duties and tariffs to be paid when you export to your target markets
Step seventeen
If your products require IP rights, it will be necessary to lay the steps to secure them in your plan. Also, indicate the criteria to file for IP rights. Will it be for markets you managed to secure distributors and retailers?
Step eighteen
Make a list of the export documents you will be needing. It is important to familiarize yourself with the terms of these documents. Some may be commercial Invoices, proforma invoice, bill of lading, and certificates of Origin
Step nineteen,
How will you manage your pricing strategies? Will your customers cover all shipping costs? Will you price your products on FOB basis or CIF? How will your pricing look like for larger orders?
Step twenty
Make a list of the things you will need to make your website international friendly. Will you want to translate certain pages? Include currency converters, add international buyers testimonials? Provide shipping choices for your international buyers etc
Final Step
Create your action plan and take action towards all you need to do. Your action plan can be the list of steps, their objectives, the tasks involved, resources needed for each step, schedule for the step and your evaluation.
The Long Term Benefits of an Export Business Plan
Planning requires a huge amount of commitment but carries important long term benefits which will explain why going through a comprehensive process of planning will worth your time and effort.
- Completing an export business plan will help evaluate your level of commitment to exporting. Your level of commitment to exporting your products and services to the rest of the world will determine how successful you can be in the long run. Less committed exporters fail along the way as they put in limited efforts to even understand the export process. Your endless commitment will expose you to tons and tons of information which will guide you through the exporting process
- Preparing a comprehensive export business plan unveils your service or product potential for the international market. You are able to identify how your products or services will stand out and benefit the clients you are seeking globally. Assessing your product potential in the global market provides an added level of confidence and an extra advantage in the market place.
- Once you have a well-developed export business plan, you have already in your possession an effective starting point for managing your global business operations in a successful manner and for as long as you maintain or modify your plan. Your plan is like your road map which if well-developed must have helped you understand the export business world effectively and guide you through the right steps and best practices.
- With a comprehensive export business plan in hand, you are able to prepare a marketing plan which will best meet your needs for the market. In so doing, you must have developed materials that can be used to best communicate your business ideas to potential investors, partners, and any other interested parties. This can help in the future when seeking international financing for your export business.
- Above all, with a detailed export business plan, you can remain focus on your primary goals and objectives for your export business. With a plan, you know what is required of you or your export department and as you achieve each step, you measure your results and determine how successful you have been through your export endeavors.
As mentioned earlier, over 67% of businesses started exporting without an export business plan which explains why a great majority fail in their export endeavors. Going through the process of creating an export business plan guides you for a business and product assessment, your readiness, and the ability to research potential foreign markets. With an export business plan, you stay focus to your primary goals and objectives, aid in developing an export marketing plan, a road map for you to follow, ability to identify your products or service potential in the global market and also you will be able to identify your level of commitment.
