Our Weblog: Excerpts of Exports
Friday, January 11, 2008
Wanna go global? Read this first!
Before you commit your time and resources to exporting, you might want to weigh the pros and cons of entering global markets. Companies that should seriously consider exporting are those that have good consistent sales, evidence that their products have potential outside the domestic marketplace...and patience. You might also be experiencing increased interest and sales from your website or trade show participation. If so, this is why you should consider exporting:
1. U.S. products have a good reputation worldwide. While not always the cheapest, the quality is consistent and the products innovative.
2. The U.S. dollar is low and probably won’t change substantially before you make good inroads and build some relationships abroad. You may be able to compete very successfully even with added transportation costs, tariffs and ways of distributing your products in global markets. You won’t know unless you investigate.
3. You are probably competing internationally even though your sales may be primarily domestic. Who are your competitors? Are they businesses from around the block or around the world? With freer trade, your competition is oftentimes not someone you know.
However, entering global markets isn’t always a good business decision.I have worked with many companies that believe that exporting is a way to prop-up lagging domestic sales. I usually convince them that exporting is not a good stop gap measure to employ while waiting for traditional sales to rise. Companies that don’t take my advice typically spend months in pursuit of export markets with limited results. By the time they start to make some headway, usually in 12 to 18 months, domestic sales pick-up. Then they re-focus their efforts once again on their domestic customers. Any interest and good will that they have built is an opportunity wasted as they probably won’t get a second chance. So when shouldn’t you look to export markets to build sales?
1. If your sales have dropped, exporting is not quick and it’s not easy. You will have to learn a different culture, a different history, perhaps a different language and certainily a different way of doing business. You are better off spending your time and resources to regain and retain domestic market share.
2. In order to regain your domestic marketshare, investigate the weak spots in your products or processes and fix them. Good processes and good products are critical not only domestically but also if you would like to consider exporting in the future.
3. If you try to export at the same time you try to regain market share, you will undoubtedly spread yourself too thin and not be successful in either arena.
So what to do? The mantra in real estate is location, location, location. For export, it is prepare, prepare, prepare.
Entering global markets is like starting over again...and that is often difficult. You have to carefully prepare an export plan as you did your business plan. And your export plan will have to address more variables than your business plan.There are different ways of doing business in different countries and usually within different regions of those countries. There are different ways of communicating, different ways of forming relationships and different business hours. There are marketing materials to be translated and websites altered to address global audiences. There are many resources out there, the free, the nearly free and the costly. Learning who does what is sometimes a challenge. But now you have a great advantage. Your products are tested, accepted and valued. And exporting is also fun, challenging and has the potential of added marketshare.