Are you “Export Ready”
“Export Ready” is a term commonly used by export assistance organizations. It indicates that a firm has the character and capacity to export. It often qualifies a company as a more consistent and sophisticated company than one that is still in the process of considering exporting, and without the commitment of financial or organizational resources to enter into foreign markets. Export readiness is often used to describe a company that is willing to take the information, resources and assistance it is provided and use it in a positive and productive manner. The ability to learn more, manage the unknowns and complete each task required to be successful are common traits of an “Export Ready” firm.
Determining Export Readiness
Determining your firm’s export readiness is the first step in establishing an export program. Many of the concepts are similar to domestic business, but as there is an international variable to every aspect of exporting, these concepts must be addressed from a different perspective. Aspects that must be considered while evaluating your export readiness include:
Knowledge, resources, experience and perception of exporting: Exporting requires learning new processes and being adaptable to the different requirements and regulations that each new country of export brings. Attention to detail is a must, as is the willingness to learn about markets, market trends and political situations. Being able to fully utilize all of the resources that are available to the company is also important as this can save time, money and frustration. Overall, companies need to be aware that exporting is not simple and shouldn’t be viewed as such. Lack of appreciation and attention to any particular area can hinder overall progress.
Level of managerial commitment: Similar to the domestic side of business, without the complete support of management and staff, the real potential of international markets may never be realized. Everyone involved in the process must be fully involved and supportive of exporting over the long term.
Access to export assistance, intermediaries and service providers: There are literally hundreds of sources of information, export assistance providers and professional firms available. One of the most important elements in the export process is to evaluate which organization can help you with your specific needs. These combinations are based on the nature of your product, its end use or end user, your physical location, the market you may target, financial considerations and any other possible concerns and issues.
Strategic Intent: “What is it that we want to accomplish?” is an important question to ask at the onset. Is the company seeking to expand the business, or keep it from declining? What are the sales goals in the short term? How about the long term? Even if the first goal is to determine whether or not the company is export ready, it is a productive first step and should help you determine whether or not you should continue. Finding out you are not ready, or even deciding against proceeding at this time is still a very valuable discovery and can save time and money.
Ongoing Implementation: After your initial export customers are located and you are exporting to your first target markets, what will your next steps be? Are you willing to establish additional markets? Are you willing to make more required product adaptations? Are you willing to hire someone overseas to represent you or open your own sales office? Again, you will need to evaluate your company’s long-term goals in order to determine whether exporting will be an integral part of your company or just a side job that you do when you have the time.
Export Readiness Specifics
Below are some important points for consideration:
How will you access marketing information and monitor it as an ongoing practice?
Who is the customer base for your product in each market?
What is the business climate like in your target markets and what are common business practices?
How will you determine and select the most appropriate channels of distribution?
Which export assistance providers can offer assistance for your company?
What are the major trade events in your industry/target market (trade shows, seminars, trade missions, etc.)?
How much capacity does the firm have? What staffing changes will be required to expand markets?
Who are the reliable suppliers of ingredients/materials for production? Is your credit level adequate for increased purchases?
What different payment and financing options are available?
Are you willing and able to adapt products to specific buyer or market preferences and regulations?
What tariff, non-tariff and tax barriers may impact the final cost of goods?
What are the harmonized tariff schedule numbers for your product (s)?
What information is necessary to issue a pro forma invoice or to provide a price quotation for an international buyer?
What documentation is required to satisfy U.K and foreign government requirements?
How do domestic and international shipping methods differ in your targeted markets?
Exporting is an integrated process that requires a solid understanding of the fundamentals plus the ability to be flexible to the changing requirements of international buyers. All aspects of the export process have to work together in unison for the operation to succeed. Just imagine yourself as an importer for a moment. What would you want in a foreign supplier? Keep that in mind as you work to be an efficient and successful exporter.
Considerations for Entrepreneurs
If you are just starting your business for both domestic and international sales, it is often wise to wait until you have established yourself domestically before you venture into exporting. Having strong U.K. sales for your products is always a good indicator of potential in foreign markets.
If you are starting out your business focusing entirely upon export, obviously there is no need to wait. In fact, starting out as confidently as possible becomes even more important, so these recommendations have even greater meaning for you. The biggest concern that export assistance agencies (and your government) have is that you never try exporting due to a lack of information or support, or that you start exporting and give it up because the resources available to you were never fully realized.
Entrepreneur Readiness Questionnaire
Smaller firms, including those just starting up, produce a significant percentage of U.K. exports. Export readiness questions differ between new and established firms, because they include those related to operating a business from the onset as well as establishing exports. The following is a list of commonly asked questions for entrepreneurial forms of business:
Why are you thinking of starting a business, and what are your specific objectives?
What makes you think you will be successful in your new venture?
Do you have basic organization and functional business skills needed for your business?
Do you speak any foreign languages or have a cultural understanding of other countries?
Do you plan to work as an Export Management or Trading Company, Agent, Broker, or some combination of the three?
When you begin, will you be working at your new business full-time or part-time?
Who is available that can assist you with the work in the beginning?
Which type(s) of products do you plan to export?
Which companies will serve as your sources of supply?
What are the characteristics of your target market?
How do you plan to meet the needs of your target market?
What modes of international transportation will you use?
What methods of payment are you flexible enough to accept?
Which U.K. export regulations and import regulations will you need to overcome?
What legal entity will you create, and what name will you use?
Where will you locate your office and supplies?
Who will comprise your team of qualified export advisors?
How much are you willing to invest into your venture?
Are you “Export Ready”