Whether you’re part of a small import-export business just getting started or a large, established business expanding to exports, it’s essential to develop an export plan. Your export plan will allow your business to reach a wider international market while keeping all of the details in order.
Despite the international shipping challenges of 2020, exporting does still have great potential due to the international demand for high-quality products and increased access to the global market through free trade agreements (FTAs). If you have something worth selling domestically, chances are your business could become more profitable if you start exporting as well.
Entering the export space without a well-curated export plan is like boarding a ship without a life jacket. You might survive, but a large wave could drown you. You need to plan ahead in order to avoid possible issues and make sure everyone in your company (not just the export department) is on the same page.
Here are 7 tips you don’t want to miss when creating your export plan.
1. Define your export objectives.
The best place to start is by laying out the goals and objectives of your international efforts. This will become the basis of your action plan. While in the process of developing your export objectives, consider these questions:
- What are your reasons for pursuing export markets?
- How committed is your upper management to exporting?
- What level of return on investment do you expect?
- How will you expand your marketing strategy to bolster your export efforts?
- By what date do you expect exporting to pay for itself?
Clearly defining your export objectives at the beginning of your export plan will allow those outside the company to understand your export goals and mission. It will also help other departments within your company support and interact with the export department in a meaningful way.
2. Check the export potential of your products.
Before diving into the details of your export plan, you’ll need to determine if your products have export potential. If your company is successful in the US or in Canada, it has a good chance of success in international markets where customers have similar needs and conditions. Another indicator of export potential is having a unique product or important features that are difficult to duplicate abroad.
There are numerous advantages for American and Canadian companies in international markets. The reputation of products made in these countries is that they are high-quality, innovative, safe, creative, and ethical. Therefore, overseas customers are eager to get their hands on these products.
3. Perform market research in the countries of interest.
After you’ve ascertained your products’ export potential, the next step is to conduct market research on the different countries. It’s not possible to perform market research for every single country, so you’ll need to decide which countries are the most promising. Countries that are similar to your company’s country of residence are likely to produce the most sales.
Don’t forget to check which countries have free trade agreements (FTAs) with your country. FTAs typically reduce tariffs and can cut through some of the red tape to make the customs process easier. For a list of every country Canada has an FTA with, click here.
4. Research export license processes and other regulations.
Most of the time, you don’t need an export license if you are exporting from the US. In Canada, businesses intending to export must obtain a business number (BN) designated for export or import/export. An export license may be required when exporting certain products from the US or Canada.
Exporting products can get complicated. It’s very important to understand customs regulations and duties for each country you export to. If you miss something, the consequences can be devastating. To make things easier for your company, it’s advisable to hire a customs broker.
5. Clarify your strategy for finding buyers.
When it comes to marketing, you may need to adjust your strategy in order to specifically target international customers (e.g. using different languages). There are numerous potential buyers for your products, including wholesalers, retailers, government agencies, and consumers. You can tailor your marketing strategy to the specific groups you choose to target.
Another consideration is what distribution channels and shipping carriers you will be using. Make sure to choose a shipping carrier that offers tracking and can reach every country you plan to export to. Be sure to factor in shipping costs, customs duties, and market research when pricing your products.
6. Determine which personnel and company resources will be allocated to exporting.
It’s useless to create an export plan if no one is designated to execute it. Every employee involved in the export effort needs to know exactly what she or he is responsible for. Establish an organizational structure that can ensure the export plan is properly executed.
As with any new department, there will need to be company resources dedicated to your export efforts. When making a budget, think about the cost of inventory, marketing, insurance costs, and overall financial projections. Check out the different kinds of international insurance for exporting here.
7. Modify the plan when necessary.
Your export plan should not be set in stone. As your exporting efforts expand, your export plan should be rewritten to incorporate new information, strategies, and any lessons learned. While your export plan may start as a simple document, it will probably grow more complex as your company’s exporting capacity grows.
If something in your export plan doesn’t work, don’t be afraid to change it. The export industry is constantly changing, and your export plan should never become too static.
Is your company new to the export industry? Let us make things easier for you by handling the customs documentation and duties for your shipments. At BorderBuddy, we offer solutions for small, medium, and large enterprises. Give us a call today!