The purpose of the Export Business Plan is to prepare your business to enter the international marketplace. This worksheet will serve as a step-by-step guide to 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.
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:
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:
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.
Industry Analysis
STEP 1: Determine your industry's growth for the next 3 years.
STEP 1: Determine your industry's growth for the next 3 years.
STEP 1: Determine your industry's growth for the next 3 years.
STEP 1: Determine your industry's growth for the next 3 years.
Talk to people in the same business or industry, research industry-specific magazines, attend trade fairs and seminars.
STEP 2: Research how competitive your industry is in the global markets.
STEP 3: Find out your industry's future growth in the international market.
STEP 4: Research government market studies that have been conducted on your industry's potential international markets.
STEP 5: Find export data available on your industry.
STEP 2: Research how competitive your industry is in the global markets.
STEP 3: Find out your industry's future growth in the international market.
STEP 4: Research government market studies that have been conducted on your industry's potential international markets.
STEP 5: Find export data available on your industry.
STEP 2: Research how competitive your industry is in the global markets.
STEP 3: Find out your industry's future growth in the international market.
STEP 4: Research government market studies that have been conducted on your industry's potential international markets.
STEP 5: Find export data available on your industry.
STEP 2: Research how competitive your industry is in the global markets.
STEP 3: Find out your industry's future growth in the international market.
STEP 4: Research government market studies that have been conducted on your industry's potential international markets.
STEP 5: Find export data available on your industry.
Your business/Company Analysis
STEP 1: Why is your business successful in the domestic market? What's your growth rate?
STEP 2: What products do you feel have export potential?
STEP 3: What are the competitive advantages of your products or business over other domestic and international businesses?
Brainstorm a list of pros and cons for expanding your market internationally. Based on your product and market knowledge, determine your probability of success in the international market.
Industry/Product:
Pros / Cons
1.
2.
3.
4.
5.
6.
Probability of Success
0% _____ 25% _____ 50% _____ 75% _____ 100% _____
Given the market potential for your products in international markets, how is your product unique?
1. What are your product's advantages?
2. What are your product's disadvantages?
3. What are the competitive product's advantages?
4. What are the competitive product's disadvantages?
What are the needs that will be filled by your product in a foreign market? What competitive products are sold abroad and to whom?
How complex is your product? What skills or special training are required to:
1. Install your product?
2. Use your product?
3. Maintain your product?
4. Service your product?
What options and accessories are available?
1. Has an after-market been developed for your product?
2. What other equipment does the buyer need to use your product?
3. What complementary goods does your product require?
If your product is an industrial good:
1. What firms are likely to use it?
2. What is the useful life of your product?
3. Is use or life affected by climate? If so, how?
4. Will geography affect product purchase, for example transportation problems?
5. Will the product be restricted abroad, for example tariffs, quotas or non-tariff barriers?
If the product is a consumer good:
1. Who will consume it? How frequently will the product be bought?
2. Is consumption affected by climate?
3. Is consumption affected by geography, for example transportation problems?
4. Will the product be restricted abroad for example tariffs, quotas or non-tariff barriers?
5. Does your product conflict with traditions, habits or beliefs of customers abroad?
STEP 1:
Select the best countries to market your product.
Since the number of world markets to be considered by a company is very large, it is neither possible nor advisable to research them all. Thus, your firm's time and money are spent most efficiently by using a sequential screening process.
The first step in this sequential screening process for the company is to select the more attractive countries for your product. Preliminary screening involves defining the physical, political, economic and cultural environment. Rate the following market factors in each category.
(1) Select 2 countries you think have the best market potential for your product;
(2) Review the market factors for each country;
(3) Research data/information for each country;
(4) Rate each factor on a scale of 1-5 with 5 being the best; and
(5) Select a target market country based on your ratings
MARKET FACTOR ASSESSMENT Country A Country B
Demographic/Physical Environment:
Population size, growth, density
Urban and rural distribution
Climate and weather variations
Shipping distance
Product-significant demographics
Physical distribution and communication network
Natural resources
Political Environment:
System of government
Political stability and continuity
Ideological orientation
Government involvement in business
Attitudes toward foreign business
(trade restrictions, tariffs, non-tariff barriers, bilateral trade agreements)
National economic and developmental priorities
Economic Environment:
Overall level of development
Economic growth:
GNP, industrial sector
Role of foreign trade in the economy
Currency:
inflation rate, availability, controls, stability of exchange rate
Balance of payments
Per capita income and distribution
Disposable income and expenditure patterns
Social/Cultural Environment:
Literacy rate, educational level
Existence of middle class
Similarities and differences in relation to home market
Language and other cultural considerations
Market Access, Limitations on trade:
high tariff levels, quotas
Documentation and import regulations
Local standards, practices, and other non-tariff barriers
Patents and trademark protection
Preferential treaties
Legal considerations for investment
taxation, repatriation, employment, code of laws
Product Potential:
Customer needs and desires
Local production, imports, consumption
Exposure to and acceptance of product
Availability of linking products
Industry-specific key indicators of demand
Attitudes toward products of foreign origin
Competitive offerings
Local Distribution and Production:
Availability of intermediaries
Regional and local transportation facilities
Availability of manpower
Conditions for local manufacture
Indicators of population, income levels and consumption patterns should be considered. In addition, statistics on local production trends, along with imports and exports of the product category, are helpful for assessing industry market potential. Often, an industry will have a few key indicators or measures that will help them determine the industry strength and demand within an international market. A manufacturer of medical equipment, for example, may use the number of hospital beds, the number of surgeries and public expenditures for health care as indicators to assess the potential for its products.
What are the projected growth rates for the two countries selected over the next 3-5 years?
STEP 2:
Determine Projected Sales Levels
STEP 3:
Identify Customers Within Your Chosen Markets
STEP 4:
Determine Method Of Exporting
STEP 5:
Building A Distributor or Agent Relationship
Comments:
__________
Support Functions
To achieve efficient sales offerings to buyers in the targeted markets, several concerns regarding products, literature and customer relations should be addressed.
STEP 1:
Identify product concerns.
Can the potential buyer see a functioning model or sample of your product that is substantially the same as would be received from production?
Comments:
_____________
What product labeling requirements must be met? (Metric measurements, AC or DC electrical, voltage, etc.) Keep in mind that the European Community now requires 3 languages on all new packaging.
When and how can product conversion requirements be obtained?
Can product be delivered on time as ordered?
Comments:
__________
STEP 2:
Identify literature concerns.
STEP 3:
Identify customer relations concerns.
In international sales, the chosen "terms of sale" are most important.
Where should you make the product available: at your plant, at the port of exit, landed at the port of importation or delivered free and clear to the customer's door? The answer to this question involves determining what the market requires, and how much risk you are willing to take.
Pricing strategy depends on "terms of sale" and also considers value-added services of bringing the product to the international market.
STEP 1:
Define International Pricing Strategy.
STEP 2:
Define promotional strategy
STEP 3:
Define customer services
Forecasting sales of your product is the starting point for your financial projections. The sales forecast is extremely important, so it is important you use realistic estimates. Remember that sales forecasts show the expected time the sale is made. Actual cash flow will be impacted by delivery date and payment terms.
Step 1: Fill in the units-sold line for markets 1, 2, and 3 for each year on the following worksheet.
Step 2: Fill in the sales price per unit for products sold in markets 1, 2 and 3.
Step 3: Calculate the total sales for each of the different markets (units sold x sales price per unit).
Step 4: Calculate the sales (all markets) for each year - add down the columns.
Step 5: Calculate the five year total sales for each market - add across the rows.
SALES FORECASTS - FIRST FIVE YEARS
1 2 3 4 5
Market 1
Units Sold _____ _____ _____ _____ _____
Sale Price/Unit _____ _____ _____ _____ _____
Total Sales _____ _____ _____ _____ _____
Market 2
Units Sold _____ _____ _____ _____ _____
Sale Price/Unit _____ _____ _____ _____ _____
Total Sales _____ _____ _____ _____ _____
Market 3
Units Sold _____ _____ _____ _____ _____
Sale Price/Unit _____ _____ _____ _____ _____
Total Sales _____ _____ _____ _____ _____
Total Sales _____ _____ _____ _____ _____
All Markets _____ _____ _____ _____ _____
COST OF GOODS SOLD
The cost of goods sold internationally is partially determined by pricing strategies and terms of sale. To ascertain the costs associated with the different terms of sale, it will be necessary to consult an international freight forwarder. For example, a typical term of sale offered by a domestic exporter is cost, insurance and freight (CIF) port of destination. Your price includes all the costs to move product to the port of destination.
A typical cost work sheet will include some of the following factors. These costs are in addition to the material and labor used in the manufacture of your product: export packing, forwarding, container loading, documentation, inland freight, consular legalization, truck/rail unloading, bank documentation, wharfage, dispatch, handling, bank collection fees, terminal charges, cargo insurance, ocean freight, other misc., bunker surcharge, courier mail.
To complete this worksheet, you will need to use data from the sales forecast. Certain costs related to your terms of sale may also have to be considered.
Step 1: Fill in the units-sold line for market 1, 2, and 3 for each year.
Step 2: Fill in the cost per unit for products sold in markets 1, 2, and 3.
Step 3: Calculate the total cost for each of the products - (units sold x cost per unit).
Step 4: Calculate the cost of goods sold - all products for each year - add down the columns.
Step 5: Calculate the five-year cost of goods for each market - add across the rows.
COST OF GOODS SOLD - FIRST FIVE YEARS
1 2 3 4 5
Market 1
Units Sold _____ _____ _____ _____ _____
Sale Price/Unit _____ _____ _____ _____ _____
Total Cost _____ _____ _____ _____ _____
Market 2
Units Sold _____ _____ _____ _____ _____
Sale Price/Unit _____ _____ _____ _____ _____
Total Cost _____ _____ _____ _____ _____
Market 3
Units Sold _____ _____ _____ _____ _____
Sale Price/Unit _____ _____ _____ _____ _____
Total Cost _____ _____ _____ _____ _____
Cost of Goods Sold All Markets _____ _____ _____ _____ _____
INTERNATIONAL OVERHEAD EXPENSES
To determine overhead costs for your export products, you should be certain to include costs that pertain only to international marketing efforts. For example, costs for domestic advertising of service that do not pertain to the international market should not be included. Examples of most typical expense categories for an export business are listed on the next page. Some of these expenses will be first year start-up expenses, and others will occur every year.
Step 1: Review the expenses listed on the next page. These are expenses that will be incurred because of your international business. There may be other expense categories not listed - list them under "other expenses."
Step 2: Estimate your cost for each expense category.
Step 3: Estimate any domestic marketing expense included that is not applicable to international sales.
Step 4: Calculate the total for your international overhead expenses.
EXPENSE COST
Market 1 Market 2 Market 3 Total Yr 1
Legal Fees _______ _______ _______ _______
Accounting Fees _______ _______ _______ _______
Promotional Material _______ _______ _______ _______
Travel _______ _______ _______ _______
Communication _______ _______ _______ _______
Equipment _______ _______ _______ _______
Advertising Allowances _______ _______ _______ _______
Promotional Expenses _______ _______ _______ _______
(e.g., trade shows, etc.)
Other Expenses _______ _______ _______ _______
Total Expenses _______ _______ _______ _______
Less Domestic Expenses _______ _______ _______ _______
(Included Above, if any)
Total Intern' Start-up Expenses _______ _______ _______ _______
PROJECTED INCOME STATEMENT - YEAR 1 to 5, ALL MARKETS
You are now ready to assemble the data for your projected income statement. This statement will calculate your net profit or net loss (before income taxes) for each year.
Step 1: Fill in the sales for each year. You already estimated these figures; just recopy them on the work sheet.
Step 2: Fill in the cost of goods sold for each year. You already estimated these figures, just recopy on the work sheet.
Step 3: Calculate the Gross Margin for each year (Sales minus Cost of Goods Sold).
Step 4: Calculate the Total Operating Expenses for each year.
Step 5: Calculate the Net Profit or Net Loss (Before Income Taxes) for each year (Gross Margin minus Total Operating Expenses).
PROJECTED INCOME STATEMENT - YEAR 1 to 5, ALL MARKETS
1 2 3 4 5
International Sales _____ _____ _____ _____ _____
Cost of Goods Sold _____ _____ _____ _____ _____
Gross Margin _____ _____ _____ _____ _____
International Operating Expenses:
Legal _____ _____ _____ _____ _____
Accounting _____ _____ _____ _____ _____
Advertising _____ _____ _____ _____ _____
Travel _____ _____ _____ _____ _____
Trade shows _____ _____ _____ _____ _____
Promotional Material _____ _____ _____ _____ _____
Supplies _____ _____ _____ _____ _____
Communication Equipment _____ _____ _____ _____ _____
Interest _____ _____ _____ _____ _____
Insurance _____ _____ _____ _____ _____
Other _____ _____ _____ _____ _____
Total Intern' Operating Expenses _____ _____ _____ _____ _____
TIMETABLE
This is a worksheet that you will need to work on periodically as you progress in the worksheet. The purpose is to ensure that key tasks are identified and completed to increase the success of your international business.
STEP 1:
Identify key activities
By reviewing other portions of your business plan, compile a list of tasks that are vital to the successful operation of your business. Be sure to include travel to your chosen market as applicable.
STEP 2:
Assign responsibility for each activity
For each identified activity, assign one person primary responsibility for the completion of that activity.
STEP 3:
Determine scheduled start date
For each activity determine the date when work will begin. You should consider how the activity fits into your overall plan as well as the availability of the person responsible.
STEP 4:
Determine scheduled finish date
For each activity determine when the activity must be completed.
ACTION PLAN
STEP 1:
Verify completion of previous pages.
You should have finished all the other sections in the worksheet before continuing any further.
STEP 2:
Identify your business plan audience.
What type of person are you intending to satisfy with this business plan?
The summary should briefly address all the major issues that are important to this person. Keep in mind that this page will probably be the first read by this person. It is extremely important the summary be brief yet contain the information most important to the reader. This section should make the reader want to read the rest of your plan.
STEP 3:
Write a one-page summary.
You will now need to write no more than a page summarizing all the previous work sheets you have completed.
Determine which sections are going to be most interesting to your reader. Write one to three sentences that summarize each of the important sections.
These sentences should appear in the order of the sections of your business plan. The sentences must fit together to form a summary and not appear to be a group of loosely related thoughts.
You may want to have several different summaries, depending on who will read the business plan.
INTERNATIONAL BUSINESS PLAN SUMMARY:
_______________
Preparing an Export Price Quotation
Setting proper export prices is crucial to a successful international sales program; prices must be high enough to generate a reasonable profit, yet low enough to be competitive in overseas markets. Basic pricing criteria - costs, market demand, and competition - are the same for domestic and foreign sales. However, a thorough analysis of all cost factors going into a cost, insurance and freight (CIF) quotation may result in prices that are different from domestic ones.
"Marginal cost" pricing is the most realistic and frequently used pricing method. Based on a calculation of incremental costs, this method considers the direct out-of-pocket expenses of producing and selling products for export as a floor beneath which prices cannot be set without incurring a loss. There are important principles that should be followed when pricing a product for export, summarized below.
COST FACTORS
In calculating an export price, be sure to take into account all the cost factors for which you, the exporter, are liable.
1. Calculate direct materials and labor costs involved in producing the goods for export.
2. Calculate your factory overhead costs, prorating the amount of overhead chargeable to your proposed export order.
3. Deduct any charges not attributable to the export operation (i.e., domestic marketing costs, domestic legal expenses), especially if export sales represent only a small part of total sales.
4. Add in the other out-of-pocket expenses directly tied to the export sales, such as:
*These items will typically represent the cost of the total operation, so be sure to prorate these to reflect only the cost of producing the goods for export.
5. Allow yourself a realistic price margin for unforeseen costs, unavoidable risks, and simple mistakes that are common in any new undertaking.
6. Also allow yourself a realistic profit or mark-up.
Other Factors to Consider
Market Demand
Market Demand - As in the domestic market, product demand is the key to setting prices in a foreign market. What will the market bear for a specific product or service? What will the estimated consumer price for your product be in each foreign market? If your prices seem out of line, try some simple product modifications to reduce the selling price, such as simplification of technology or alteration of product size to conform to local market norms. Also keep in mind that currency valuations alter the affordability of goods. A good pricing strategy should accommodate fluctuations in currency.
Competition - As in the domestic market, few exporters are free to set prices without carefully evaluating their competitor's pricing policies. The situation is further complicated by the need to evaluate the competition's prices in each foreign market an exporter intends to enter. In a foreign market that is serviced by many competitors, an exporter may have little choice but to match the going price or even go below it to establish a market share. If, however, the exporter's product or service is new to a particular foreign market, it may be possible to set a higher price than normally charged domestically.
If you are interested in a half year duration see 6 month car insurance for helpful tips on the topic. How about getting more favorable premiums costs for younger drivers? see car insurance for 17 year olds and motor car insurance for under 21 and vehicle insurance for male and female under 25 years old. Here is another list of drivers insurance useful articles,
As for helpful tips regarding no deposit premium payments see car insurance with no deposit and for a list of low cost brokers, agents and companies see car insurance with no deposit companies. Read the following informative article if you are looking for better rates for the young drivers in your family, cheaper vehicle insurance for young drivers. Now, for discovering new ways to get lower quotes go to general car insurance Read this article if your after high risk car insurance information.
How about getting a better deal on first time driver? just click the link. It may come a time that you'll be interested in canceling your policy, use this article for the instruction of how to do it. Our drivers insurance hub page features a list of guides that can surely help you get dirt cheap car insurance for teens drivers rates. For those of you who seek cheap quotes for a shorter term policy, read this article. and here are tips and advice for special interest groups such as young drivers and temporary insurance.
If you have first drivers in your family look here for useful advice regarding cheap drivers first car insurance on getting very very cheap car insurance quotes, other types of policies can include the following: no deposit car insurance, pay monthly, insuring classic cars for young drivers, getting better deal on cheap liability car insurance cost, locating good rates for new drivers. how about if you are interested in pay as you go auto insurance? yep there is a guide for you. And here is a list of car insurance companies cheapest. And the list concludes with a way to calculate car insurance estimate without personal information.
Disclaimer: While every effort is made to ensure that the content of this website is accurate, the website is provided “as is” and Bizmove.com makes no representations or warranties in relation to the accuracy or completeness of the information found on it. While the content of this site is provided in good faith, we do not warrant that the information will be kept up to date, be true and not misleading, or that this site will always (or ever) be available for use. Nothing on this website should be taken to constitute professional advice or a formal recommendation and we exclude all representations and warranties relating to the content and use of this site.
Copyright © by Bizmove. All rights reserved.
Copyright © by Bizmove. All rights reserved.