How to Begin Exporting

The purpose of this chapter is to teach you exactly how to prepare your business to enter the international marketplace. This is a step-by-step guide that will lead you through the process of exporting your product to an international market. The worksheet is divided into sections.

Each section of the export business plan must be completed before you start the next section. After you have completed the entire worksheet, you will be ready to develop an international business plan to export your product. Once the business plan is completed, an in-depth analysis of your readiness to export can be completed.

Products/Services

STEP 1: Select the most exportable products to be offered internationally.

STEP 1: Select the most exportable products to be offered internationally.

STEP 1: Select the most exportable products to be offered internationally.

To identify products with export potential for distribution internationally, you need to consider products that are successfully distributed in the domestic market. The product needs to fill a targeted need for the purchaser in export markets according to price, value to customer/country and market demand.

What are the major products your business sells?

1. ______________________

2. ______________________

3. ______________________

What products have the best potential for international trade?

1. ______________________

2. ______________________

STEP 2: Evaluate the products to be offered internationally.

What makes your products unique for an overseas market?

1. ______________________

2. ______________________

3. ______________________

Why will international buyers purchase the products from your company?

1. ______________________

2. ______________________

3. ______________________

How much inventory will be necessary to sell overseas?

1. ______________________

2. ______________________

3. ______________________

Identifying Products With Export Potential

List below the products you believe have export potential. Indicate the reasons you believe each product will be successful in the international marketplace.

Products/Services / Reasons for Export Success

1. _____________________

2. _____________________

3. _____________________

4. _____________________

5. _____________________

Decision Point: These products have export potential:

________________________________

________________________________

________________________________

________________________________

Planning

What is the purpose of completing this workbook?

You know that you want to see your company grow through exporting.

Five reasons it will be worth your time and effort:

Careful completion of this workbook will help evaluate your level of commitment to exporting.

The completed workbook can help you evaluate your product's potential for the international trade market.

The workbook gives you a tool to help you better manage your international business operations successfully.

The completed workbook will help you communicate your business ideas to persons outside your business and can be an excellent starting point for developing an international financing proposal.

Businesses managed are more successful when working from a business plan.

Can't I hire someone to do this for me?

No! Nobody will do your thinking or make decisions for you. This is your business. If the business plan is to be useful, it must reflect your ideas and efforts - not those of an outsider.

Why is planning so important?

The planning process forces you to look at your future business operations and anticipate what will happen. This process better prepares you for the future and makes you more knowledgeable about your business. Planning is vital for marketing your product in an international marketplace.

Any firm considering entering into international business transactions must understand that doing business internationally is not a simple task nor one for the faint of heart. It is stimulating and potentially profitable in the long-term but requires much preparation and research prior to the first transaction.

In considering products for the international market, a business needs to be:

Successful in its present domestic operation.

Willing to commit its resources of time, people and capital to the program. Entry into the international market may take as long as two years to generate profit with cash outflow during that period.

Sensitive and aware of the cultural implications of doing business internationally.

Developing a business plan helps you assess your present market situation, business goals, and commitment which will increase your opportunities for success.

What's the bottom line for me if I do the plan?

Research shows that small business failure rates among new businesses are significantly lower for new businesses that have developed a business plan.

Isn't planning just for the big companies?

Planning is important for any organization that wants to approach the future with a plan of action. The future comes whether you are prepared for it or not. A business plan helps you anticipate the future and make well-informed decisions because you have thought about the alternatives you will be facing.

How often do I have to do this?

A plan must be revised as needed, at least once a year. Planning is a continuous process. You will be surprised how much easier it is to develop a business plan after the first time. Plus, after a revision or two you will know more about your international business market opportunities to export products.

Goal Setting

Determining your business goals can be a very exciting and often challenging process. It is, however, a very important step in planning your entry into the international marketplace. The following exercise is intended to help you clarify your short and long-term business goals.

STEP 1: Define long-term goals.

A) What are your long-term goals for this business in the next 5 years? Examples: increase export sales by ___% annually; develop country cultural profiles.

B) How will the international trade market help you reach your long-term goals?

STEP 2: Define short-term goals.

A) For your international business, what are your first year goals? Examples: attend export seminars, select a freight forwarder.

B) What are your two-year goals for your international business products/services?

STEP 3: Develop an action plan to reach your short-term goals by using international trade.

STEP 3: Develop an action plan to reach your short-term goals by using international trade.

STEP 3: Develop an action plan to reach your short-term goals by using international trade.

STEP 3: Develop an action plan to reach your short-term goals by using international trade.

 

 

Getting the Cash Required to Starting a New Small Business. Now that You have calculated your first financing requirements, where
will you get the money? The first source is your personal savings. Subsequently relatives, friends, or other individuals may be
found who would like to"venture" their savings in your business. Before getting too big a share of cash from outside sources,
remember that you ought to have private control of sufficient to assure yourself ownership.

Once you can show that you have carefully worked out your fiscal Prerequisites and can demonstrate experience and ethics, a
financing institution might be willing to finance a part of your operating needs. This may be done on a short-term basis of from
60 days to as much as one year. Any institution that has money to lend is mainly concerned with safety. The safety may be a
business asset, but when you are just starting the ideal security is usually your house or some other private asset.

The second thing the lender will want to see is Some Kind of Business plan. If you complete a business plan - which includes a
cash flow forecast - the lender will observe you have completed some serious and realistic thinking about your company and be more
likely to think about your request.

Be familiar with your banker. In picking a banker consider Progressiveness, attitude toward your company, credit services
provided, and also the dimensions and management policies of the bank. Is the lender innovative? The physical appearance of this
lender may provide you some indication. When the employees are pretty youthful, interested in your problems and active in civic
affairs that the lender is very likely to be innovative. The character of the lender's advertising may also be a clue for its
progressiveness.

To be effective the banker should be interested in helping you to Become a better manager, and develop a continuing relationship
that will mean profitable business for you and the bank through time.

Will the bank give you the type of credit you want? By Way of Example, If seasonal accumulations of stock turned into an issue
will the bank create a loan against field or public warehouse receipts? If your funding is tied up in accounts receivable
throughout your hefty selling year, will the bank accept these receivables as security for a loan? Will the bank contemplate a
term loan?

In the end, know the size and direction policies of the bank. Will Your maximum requirements fall well within the bank's"legal
limit"? If you intend to do some export business, does it have a foreign exchange department? In the event that you or your
dealers sell on installation conditions does the bank have facilities for handling installment paper? How profoundly is the bank
concerned with the rise and prosperity of the local community?

When you handle your banker, then sell yourself. Whether or not you Need a bank loan, make it a practice to stop by your banker at
least once a year. Openly discuss your strategies and difficulties. It is the bank's company not to betray a confidence. If you
require financial assistance carefully prepare, in written form, complete information that will present a comprehensive
comprehension of your whole proposition. Many business-people or prospective small business operators ruin their chances of
getting financial help by neglecting to present their proposition properly.

Trade creditor or equipment maker, Firms from which you Purchase equipment or merchandise may also provide capital to you in the
kind of extended credit. Manufacturers of store fixtures, cash registersindustrial machinery frequently have financing plans under
which you may buy on an installment basis and cover out of future earnings. You need not cover the goods simultaneously. If goods
are for resale, then no security other than repossession rights of the unsold merchandise is involved. But too extended a use of
charge may prove expensive. Usually money discounts are offered when a bill is paid within 10, 30, or 60 days. By way of instance,
a term of sale offered as"2-10; net 30 days" signifies a cash discount of 2 percent will be granted if the bill is paid within 10
days. If not paid in 10 days, the entire amount is due in 30 days. If you do not take advantage of the money discount, you're
paying 2 percent to use money for 20 days, or 36 percent per year. This is high interest. Prevent it.

One of the main causes of failures among businesses is Inadequate financing. If you do go into business, remember it's your
responsibility to provide, or obtain from others, sufficient money to provide a firm foundation for your enterprise.

Sharing Ownership With Others. Now that you have determined what Business to begin and about how much capital will be required,
you may find it necessary to connect with a couple of partners to launch the enterprise.

If you lack certain technical or management skills which are of Major value to your chosen business a partner with these abilities
may prove a most satisfactory way to pay the deficiency. If you're extremely skilled in your special area but lack direction
training and abilities, you may search for a partner with a background in management. If you may need more start-up money, then
sharing the ownership of this company is one way to obtain it. Great care should be taken in deciding upon a spouse. Personality
and temperament, as well as ability to render technical or financial assistance, influence the achievement of a pa333ship.

A partnership can be a mixed blessing. A spouse who places in time Or money has a right to expect a share in conducting the
enterprise.

In a venture the liability for the debts of the firm is Infinite, just as it is in a single proprietorship. This means the owners
are Personally accountable for the company's debts, even in excess of the sum they Have spent in the organization. In a
corporation the liability of the owner is Limited To the amount they pay for their shares of stock. A partnership, such as one
proprietorship, lacks continuity. Thus, the business terminates upon the Death of the owner or a spouse, or upon the withdrawal of
a partner.

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