Exporting goods abroad makes the local company more competitive in the international market, increases the level of creativity and innovative thinking and raises the production level of the company. Winning overseas markets is a key element for kick starting growth for your small business because of a wider market.
The question to ask is how a small company can crack the international markets given the stringent demands to be satisfied?
The first thing is
to do a thorough research on the key legislation and principles of
exporting. For instance, exporting goods to the US market, you must
go through ESTA for
authorization. As a consequence, this article examines the benefits
of exporting, risks involved and how you can mitigate those risks.
Reasons for exporting products to abroad
To increase your sales volume by increasing the potential of reaching out to a wider market;
Increasing profits;
Lower the costs of production through putting idle production ability to work;
To enjoy economies of scale brought about by a broad range of acceptance across the globe. Here you will be forced to manufacture products that are appealing to the international tastes.
Balancing growth and reduce risk. Exporting your goods to several foreign markets can assist you to reduce the amount of risk that you may be exposed to as a result of fluctuations in business cycles.
Minimizing the effects of seasonal weather pattern fluctuations with other parts of the world.
Overcoming the likelihood of low growth in the local market.
Exporting goods to overseas markets is one way of increasing revenue and profitability for your small business due to expansion into the new markets. However there are factors you have to consider before diving into the arena.
Your company must have a good track record in the local market. This means that your company must enjoy increased demand in the local market.
Find out if your local competitor are exporting goods to the same market you want to export to and the company that will be a competitor in the new market.
Evaluate if your company has the financial muscle for extra market development like advertising and human resource to satisfy the new market demands.
Ensure that you are aware of the standard practices and procedures in the countries you want to export your goods to. Therefore, getting the local knowledge will be a key asset before exporting your goods.
As an exporter, you will face with a myriad of risks ranging from operations, product and financial risks. And how you mitigate them will dictate your survival in the international markets.
Export risks and how you can mitigate them
Late or no payment – insure your business against non -payment of export invoices
The fluctuation of exchange rates – the profit margins of your company can be impacted as a result of exchange rates fluctuation. Avoid this risk by matching income and expenditure in the currency of the export country.
Product compliance – ensure that your product complies fully with all the stipulated specifications in regard to standards and regulations of the export country.
Loss and damage – insure your goods on transit against damage and loss whether by road, air or rail.
Conclusion
Exporting your
products to overseas markets is one way to make your company more
competitive in the international market.
Small Business Guide | Exporting Goods Abroad
Written by: Brian Daniel Young Published by: Cerilene.com Copyright holder: Brian Daniel Young on
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