Exporting, because of its global nature, is often seen as being quite glamorous. Also, because of the apparent size of the global market, some companies may think that entering export markets must be very easy. For these and other reasons, many companies turn to exports as a means of salvation from small and highly competitive local markets. These are the worst reasons for exporting. Exporting is a complex, time consuming and very difficult endeavour. It should only be attempted by companies that have the resources to tackle these foreign opportunities – exporting is unfortunately not for everyone. Exporting is one of the most challenging business activities you will ever take on. The road to export success is fraught with risks and barriers around every turn. You will need to deal with radically different environments, communicate with diverse cultures in new languages, overcome a multitude of new laws and political regimes, face the prospects of competing with the very best exporters and producers around the world, and absorb a variety of costs that are measured in dollars, euros and pounds. There is a mountain of documentation you will need to complete and you many even face legal action from the South African authorities if you fail to get your customs, VAT and exchange matters in order. So you are under pressure from home and abroad and at the end of dark tunnel there is always still the risk of non-payment.
Good heavens, you say, we thought this was ExportHelp!? This doesn’t sound like help – it sounds like a threat? My reply is simple – you must be aware of these challenges and you must be willing to endure the cost, time and effort involved in overcoming these challenges if you want to break in to these new markets. If you enter the export environment thinking its all about the glamour of overseas travel and big orders simply because the rand is weak, you will be facing an expensive lesson. On the other hand, if you do endure and succeed, you will be a better company for it. You will have stepped up to the plate and become a global competitor and your local business will also flourish as a result. Exporting is definitely worth it!
Being export ready
You can be said to be export ready if you have:
- Obtained senior management’s absolute support for and commitment to the firm’s export efforts
- An established product that is unique in one or more ways and that is competitively priced
- Confidence that your suppliers will continue to supply you with the raw materials and components that you need to meet export demand, even if there are unexpected changes in the domestic and/or international marketplace
- The capacity to easily re-design your product to suit your intended market
- The ability to adopt additional competitive features such as using new materials, meeting international standards, integrating new technologies, incorporating new packaging, etc.
- Spare production capacity so you can quickly fulfill a large export
- Adopted consistent quality control in your production process, which you can still adhere to even if you increase production to meet export demand
- An established and profitable national market in your home country
- An existing system for managing your expenses and income
- Adequate cash, savings, or access to capital to finance your production and marketing efforts for a year or two
- Trained staff that have experience in export marketing and logistics
- One or more foreign-speaking personnel with good customer service skills
- The capacity to survive for at least two years without making a large profit
- Attended export training yourself or solicited export advice from appropriate experts in this field
- Attended export networking events (such as the Exporters’ Club) or conferences
- Developed a formal, documented export plan
- Already conducted some export marketing research on which to base your forward thinking
- Considered how you will address the various export risks that you will face
If you are weak in any of these areas, you will need to focus on addressing the areas of weakness before you tackle the export market!
Exporting is worth considering only if you…
- …have a unique product.
- …are an established, successful firm.
- …are already selling nationally and need to expand your sales.
- …are competing quite successfully against imported products.
- …are in a position to finance your export endeavours for a period of 12 to 24 months without necessarily generating any immediate income.
- …already have good contacts in your industry abroad who may be prepared to help you.
- …have the necessary export skills within your firm.
On the other hand, you should stay away from exporting if you…
- …do not yet have a formal business plan for your local market.
- …are not yet selling your products nationally.
- …are struggling in the domestic market.
- …are producing and selling a very ordinary product.
- …have limited finances and resources.
Learn more about your export readiness
Deciding whether you are ready to export or not can be quite difficult. For this reason, we have included an export readiness checker for you to fill out. This questionnaire should provide you with some idea as to whether you are ready to export or not.
Alternatively, there many export readiness checklists that have been produced by many different organisations. We have identified a number of websites that you can visit to learn more about your export readiness. Many of these include a self-administered test that you can take to measure your export readiness. Take an hour and work through these sites and try a few of the tests to see where you stand and where you weaknesses are. It may prove to be time well spent.
- ExportHelp’s Export Readiness diagnostic
- Export readiness assessment– thedtic
- Are you ready to export– BusinessLink
- Assessing export readiness– TradePort
- Export readiness assessment– SAP&DC
- Export readiness checklist– BusinessVictoria
- Presentation on export readiness– International Trade Centre, Geneva
- Export readiness checklist– Services for Alberta Exporters
- ExportAble –Export Development Canada