Four Questions to Ask Before Your Business Looks OverseasMay 21, 2014
I work with a lot of small businesses looking to begin exporting. It’s not uncommon for me to be asked, “How do you know if a company is export ready?”
The more relevant question is, “How does a company know that it’s export ready?” That’s a tricky one! For me, there are four main questions a company has to answer before it knows it’s export-ready:
- What’s your goal? It’s important to understand what you want to get out of exporting. Do you want to soften sales cycles? Do you want to diversify risk? Do you want to grow sales or keep production facilities busy?There are a variety of potential objectives and there may be more than one driver behind your interest in export. It’s important to be clear about the objective that is most important, though, and avoid objectives that are unrealistic or unattainable.
- Do you have the resources? Drilling down a bit, you need to know the resources necessary to achieve your most important objective. When it comes to resource constraints, these are the big three:
- Management and Personnel: Can management devote the necessary time and manpower to support global business?
- Production Capacity: Can your business meet an increase in demand?
- Financial Resources: You don’t necessarily have to have money in the bank, but you do need to be bankable.
- Have you done your research? You really need to do some evaluation here – both about your company and your target markets. You need to know your competitive advantage and whether it’s something global consumers will value. You have to know your buyer’s profile and how buyers will find you and your products. You also need to know how much risk you are willing to take. There is no right export market but there are a lot of export markets that may be wrong for your company. Following the herd can lead you over the cliff!
- Are you committed? If you’ve read this far, you probably have the final thing I look for in determining export readiness: commitment. Export isn’t any more complicated than any other line of business. However, export requires compliance with U.S. and foreign government regulation, observance of foreign cultural and business norms, a willingness to follow and anticipate current events, and the flexibility to roll with the punches. Export isn’t for everyone, but with the right planning and support, there’s no reason that export has to be wrong for you.
If you know the answers to the above questions and you feel ready to get started exporting, it might be time for you to visit your nearest Export Assistance Center. If not, you might want to talk to your local Small Business Development Center.
If you need a little more information, our Basic Guide to Exporting is a great resource to help you evaluate your export readiness.