Plan crucial to exporting success

Exporting is crucial to our country's economic health. It is not only important for big businesses but for small companies as well.

On a global level, increased exports mean business growth, and business growth can mean more jobs. It is critical for businesses to think globally, even if they are not exporting yet. Foreign owned companies are competing for the market and if your business is going to maintain its market share it means keeping pace with the competition.

Just as with any business strategy, exporting cannot be taken lightly. A careful assessment should be made as to the value of expanding into a new market, especially a foreign market.

There are advantages and disadvantages to exporting. Consider some of the advantages that can help your business:

Increase sales and profits.

Reduce dependence on existing markets.

Stabilize seasonal market changes.

Enhance potential for expansion.

Gain information about foreign competition

The potential disadvantages must also be carefully weighed in the decision making process:

Added costs.

Longer waits for payment.

Modified product or packaging.

Obtaining special export licenses.

Developing new promotional materials.

Neither of these lists is complete but they provide a sample of some the planning that must go into deciding whether exporting is right for your business, right now.

Is exporting appropriate for your business? Begin by identifying products with export potential for distribution. The product has to fill a need for the purchaser in an export market according to price, value to customer/country, and market demand.

Create a pricing strategy for exporting and identify markets that match your product. Determine the method by which you will enter the foreign market. These include indirect exporting, which involves using an intermediary as an export agent; 'piggybacking' with a company which already exports and agrees to sell your product along with its own; and direct exporting, which has your business directly involved in the international market either by direct sales to the end-user or perhaps with foreign government buying agents.

Be aware of legal requirements, transportation issues, and costs as well as projected revenues.

One of the biggest export errors has been identified as a lack of commitment to the process. This means not only a time commitment but also putting the financial resources in place. Another mistake is making exporting a low priority and utilizing it as a back-up market that is abandoned when the local market booms. As a novice exporter, find help. It can be useful to hire customer's brokers, freight forwarders and other specialists who can ensure that the technical details are correct.

There are no rules as to which businesses should export, and which should not. Start by creating an international business plan. This can serve as your manual for assembling facts and identifying constraints. It can also give you objectives, a timetable and milestones by which to measure progress.

Check out the SBA Web site at www.sba.gov for a sample international business plan outline.