The Ultimate Guide to Exporting

Exporting is the process of selling goods or services to foreign countries. It is a critical driver of economic growth, job creation, and innovation on a global scale. Exporting allows your business to reach new customers, diversify into new markets, and increase your revenue potential. However, it also comes with challenges, including navigating international regulations, cultural differences, and logistical complexities. Despite these challenges, your business can benefit from significant rewards, including increased profitability, market share, and growth. In this article, we'll provide a comprehensive overview of exporting, including an explanation of why exporting is important, how to get started, and key considerations for success beyond the first sale. Whether you're new to exporting or looking to expand your global reach, this guide will equip you with the knowledge and tools needed to navigate the world of international trade.

Why would I want to export?

Many businesses consider exporting as a viable option to expand, but are often held back by apprehension, confusion, and fear: 

• You may have heard horror stories of businesses failing in export, which has in turn compromised their domestic operations.
• You believe your offering has international potential, but you don’t know where to begin or how to enter new markets effectively.
• You feel unsure about how to position your business for success.

Even if your business has international potential, rushing into export without support can lead to costly mistakes. The opportunity for growth through exporting is real, but so are the challenges. This guide aims to help you overcome these concerns by providing a structured approach to developing an export-ready business.

In this article, you will gain knowledge across three key areas:

• Overview of the Path to Market: You’ll understand the opportunities versus the challenges of exporting.
• Path to Market Foundations: You’ll learn how to establish clear corporate objectives and from there assess and build your business’s capability and capacity to achieve your goals.
• Market Relevance: You'll be equipped with the knowledge and skills to change and adapt your offering based on the markets you plan to enter.

By addressing these areas, you'll be better prepared to enter new markets, grow your business, and succeed in the global marketplace.

The pros and cons of exporting

The global market offers immense potential for businesses looking to expand through exporting. Before venturing into international trade, you must weigh up the advantages and disadvantages of your business. Here are some to consider: 

Pros:

• Increased sales and revenue potential
• Diversification of customer base
• Access to new markets and opportunities for growth
• Enhanced competitiveness and market presence

Cons:

• Regulatory compliance requirements
• Cultural and language barriers
• Logistical challenges and transportation costs
• Currency exchange rate fluctuations

Ultimately, your decision to export will bring increased costs, complexity, and new competitors into your business. With all this new risk, you must have an answer to the question, why do you want to export? Once you define your motivations to want to export, the next thing you need to do is define your corporate objectives.

Corporate objectives play 3 key functions:

1. Focuses the business on a very clear target that everyone is clear on. This means you aren’t haphazardly chasing sales without a well thought out strategic plan.
2. Allows for resource planning, to prioritise which resources will be assigned to your domestic operations versus your export operations, with the sole purpose of achieving the goals set out in your corporate objectives.
3. It provides accountability, so each decision can be measured against the goal, and all team members can be held accountable.

Setting corporative objectives for your business 

Establishing export-focused corporate objectives is essential for guiding your business's international expansion. Begin by setting a timeline that aligns with your strategic vision; some companies may opt for a 2-year plan, while others may think in 10-year cycles. Consider where you want your business to be at the end of this period, whether it's having a certain amount of money in the bank, achieving specific accreditations, outperforming competitors, owning assets, or expanding into new sales channels. For a comprehensive guide on this process, view our free resource, How to Set and Achieve Corporate Objectives.

It's one thing to set corporate objectives, but it is another thing to achieve them. Having a comprehensive understanding of your business’s capabilities and capacities is a fundamental step to ensuring that you are adequately resourced to accomplish the goals you set out to achieve. 

How to evaluate your capabilities and capacities

When we talk about capabilities, we refer to the skills, abilities, and knowledge within an organisation. These are the building blocks that enable you to accomplish your tasks effectively. Capacity, on the other hand, pertains to the ability to perform a task and can be described as your company's ability to absorb the demand and change of everyday business. Before diving into export markets, it's a good idea to evaluate your business's capabilities and capacities. This helps you spot areas for improvement and allocate resources more effectively. By doing this, you can align your efforts with your corporate objectives and boost your chances of success in exporting. Taking this proactive approach ensures your resources are used efficiently, allowing you to address any gaps and seize opportunities for growth and expansion.

For a detailed guide on how to assess and build your company's capabilities and capacities, check out our online resource, How to Assess and Understand Your Business Capability and Capacity. 

Areas of capacity development

Once you ascertain where your domestic business sits, you need to look at the six different areas of capacity development:

• Management: Assess the strength and effectiveness of your leadership team as well as their willingness to export.
• Human Resources: Review your workforce's skills, experience, and training needs.
• Financial Resources: Analyse your financial stability and work out if you can fund your export operations until they build momentum.
• Communication Strategy: Give thought to how you are going to build and maintain relationships abroad.
• Time Frames & Scalability: Establish realistic timelines for achieving your export goals. You also need to determine your business's ability to scale operations to meet increased demand both domestically and internationally.
• Competitor Response: Keeping track of your competitors becomes more difficult as you enter export markets. How are you going to keep your finger on the pulse in other parts of the world?

Building capacity requires focus and commitment in all six key areas. Businesses that fail in exporting often do so because they assume their domestic capabilities and capacities are sufficient. These businesses struggle to absorb the increased demand and adapt to the changes required for international success. To avoid this pitfall, it's crucial to proactively develop and enhance these areas, ensuring your business is well-prepared to handle the complexities of the export market they choose to enter. 

Path to market relevance for your product or service

When building a market-relevant and ready approach, you must continually challenge the assumptions of your brand, company approach, and deliverable service or product. While your approach might work in your home country, it will rarely translate to success without some modification in your chosen export market.

Steps to Ensure Market Relevance

• Understand Market Needs: Evaluate the new market's needs and wants, not just based on your current offerings. Domestic success does not equal international success.
• Independent Review: Obtain an independent review of your product or service. This can be confronting but is crucial for understanding how your offering is perceived in a new market.
• Evaluate Product Positioning: Determine where your product stands in the international market. Often, a product considered high-quality domestically may only be mid-tier internationally.
• Adjust Financial Models: Adapt your financial models based on realistic international market assessments. Ensure pricing and revenue expectations align with the market's valuation of your product or service.
• Competitor Analysis: Understand the competing offerings and how clients in the new market derive value from products or services. The use and features valued in one market may differ significantly in another.
• Marketing and Branding: Assess whether your product will appeal to customers in the new market. Ensure your brand name, colours, and overall image are appropriate and appealing in the new cultural context. Understand what your brand elements represent in the new market to avoid any unintended negative connotations.

Just as you need the right electrical adaptor to make your appliance work in a different country, you need to adapt your product to suit the market you're entering. Each market has unique requirements, preferences, and regulations, and your product must be tailored to ensure compatibility and success in diverse markets.

Key considerations

• Evaluate potential buyer demand.
• Understand how clients in different markets use your product or service.
• Recognise additional features or service requirements that might be standard in your domestic market but not elsewhere.

 The keys to export success

Exporting offers immense opportunities for business growth, but it requires careful planning and execution. By setting clear corporate objectives, understanding and evaluating your capabilities and capacities, and ensuring market relevance, you can successfully navigate the complexities of international trade. Preparation is key, and utilising available resources will give you the best chance for success. Visit our website to explore our free resources, including, How to Set and Achieve Corporate Objectives and How to Assess and Understand Your Business Capability and Capacity.  

Where can I get help to start exporting?

Palaudin Consulting has over 20 years of experience working with businesses like yours. Many businesses struggle to balance domestic operations while entering new markets. That's why we've developed systems, training, and coaching tools to help hundreds of businesses build successful export strategies. Schedule a call or visit our website for more information.