The U.S. export market continues to grow, and the federal government is pressing to provide programs and resources that help U.S. companies succeed internationally.
Making the decision to export, however, is significant. Is your product marketable overseas? Can your business tolerate the benefits versus the trade-offs of exporting?
To help you assess your exporting readiness, take a look at SBA’s Export Business Planner. This invaluable, hands-on exporting guide provides a roadmap for creating an export business plan, discovering foreign markets, developing a marketing plan, exploring financing, costing your product and more.
Here’s what the Export Business Planner has to say about assessing your business’ readiness to export – backed by a series of useful worksheets to help you work through this important exercise.
- Determine the Benefits and Trade-Offs of International Market Expansion
Start by brainstorming a list of benefits and trade-offs for expanding your market internationally. For instance, one benefit might be a reduced dependence on domestic markets. Trade-offs? You may need additional financing, or be willing to use short-term profits to ensure long-term goals, or hire additional staff.
Your list of benefits and trade-offs should be based on your current assumptions about 1) your company, 2) your company’s products and 3) market knowledge.
- Perform a Business/Company Analysis
Next, you’ll need to perform an in-depth analysis of your existing business to determine the feasibility of growth. This entails evaluating your company and its attributes. Check out page 32 of the planner for a worksheet that can help you with this exercise.
- Conduct an Industry Analysis
Once you have examined the status of your own company, the next area for consideration is your overall industry. How is it currently involved in the global marketplace? This review will help you to capture key aspects of your industry that will affect your exporting decisions. Again, check out the worksheet for this exercise on page 34 of the planner.
- Identify Products With Export Potential
Part of the overall analysis of your current business involves identifying products that may have export potential. These have sold successfully domestically or maybe have had marginal success in the U.S. but potential for high demand overseas. Many small businesses make 100 percent of their sales in foreign markets.
Start by listing the strengths and weaknesses of products/services you believe might have export potential. Then, select the most exportable products/services to be offered and evaluate them. The worksheet on page 36 can really help you narrow down your product focus.
- Marketability: Match Your Product/Service with a Global Trend or Need
Once you’ve identified products/services with export potential, the next step is to identify the most profitable foreign markets for those products. This means gathering foreign market research. Work through the worksheet that starts on page 39 to narrow your choices to the three most-penetrable markets. Ask yourself:
- Which countries are best-suited for your product?
- Which foreign markets will be easiest to penetrate?
- How does the quality of your product compare with competing in-market goods?
- Is your price competitive?
- Who could your major customers be?
To help you with this exercise and to continue to explore these top three markets in-depth, pages 25-27 of the planner provide links to essential resources that can help you determine your product’s marketability overseas. There is also information about regulatory and political considerations that can affect your exporting decisions.
- Define Which Markets to Pursue
Once your research has revealed the largest, fastest-growing and simplest markets to penetrate for your product or service, the next step is to define which markets to pursue. Here are some tips to bear in mind (and refer to the worksheet on page 42 of the planner for guidance):
- It’s best to test one market and then move on to secondary markets as your expertise develops. SBA data shows that new-to-export businesses often tend to choose too many markets at first. For most small businesses, choosing one to three foreign markets initially is recommended.
- Focusing on regional, geographic clusters of countries is more cost effective than choosing markets scattered around the globe, especially when you undertake trips or marketing events.
What’s next? Once you’ve determined your export readiness and investigated foreign market options, refer to the SBA’s Export Planning Guide for more tips and worksheets to help you plan, finance and execute your small business exporting strategy.
By Caron Beesley, Contributor