The opportunities for selling products and services abroad are greater than ever for U.S. businesses. Statistics show that most consumers live outside of the U.S., and U.S. products are by and large revered for their quality. International trading is becoming more accessible than ever. Does this mean your business is ready to start exporting? Not necessarily. Exporting may not right for everyone. There are certain factors that should be considered.
- Is your business successfully selling products or services here in the U.S.? Having basic experience in profitably managing a business is crucial to having success abroad. If you are successful domestically, most likely you will have a good grasp on costs, pricing and production. It is critical that businesses have success in these areas, especially if they are intending to export.
- What is the production capacity? If you are planning to sell abroad, you must be ready to produce if a sale is successfully secured. Whether domestically or internationally, failure to fill an order can be very detrimental. Understanding the production capacity is essential before export sales are pursued.
- Do you have a reasonable understanding of the time frame needed to start exporting? Typically export sales are not obtained in short time frames — it could take months to establish sales. Is the business willing to devote the time and effort needed? Sometimes patience is the greatest asset needed for international sales.
- Just as here in the U.S., a business cannot be all things to everybody. You will need to understand clearly why consumers purchase your products or services, in addition to who your typical buyers are and why they are purchasing. Targeting the typical foreign buyer will be essential to successful exporting.
- Have you done research on foreign markets? You will need to understand which market shows the most potential. It is important to understand the existing trade with a country, the riskiness and accessibility of that market, the ease of doing business in that country and channels of distribution. After this research, you can start to identify potential markets.
- Can your products be adapted to meet foreign market requirements? Modifications may include a change of language or packaging. There may be a need for certificates or licenses to have a product enter a foreign country. Are you aware of what is needed, and can you make these changes?
- Are you ready to travel to that market to meet with potential customers or partners if needed? In most cases, you will be required to meet face-to-face with potential customers or partners. Obviously, this travel involves a commitment of time and money. Are you willing to invest both assets?
- Is there someone on your team who understands the issues related to exporting, such as export regulations, global logistics, international payment terms, export documents and risk mitigation? The bottom line is that this knowledge is needed and will have to be obtained. A business will need to be prepared to get this knowledge if it does not currently exist in the company.
These are only a few of the issues a business must address before engaging in exporting. Fortunately, there are many resources available to assist business owners to become successful exporters. For assistance in exploring your company’s potential export markets, contact one of the 18 offices of the UGA SBDC.
Darrel Hulsey is the Director of the UGA SBDC International Trade Center.