Top tips for successful exporting

Top tips for successful exporting

When it comes to operating beyond your domestic market and navigating new territories, there’s some preliminary work to do in order to increase your chances of success. We’ve collated our top tips for what to consider before you start exporting and how you can minimise your risks.

Our tips on how to start new export relationships

What to consider

  • Make sure your domestic business is stable with the financial capacity to export before pursuing overseas markets
  • Create an export plan to help you evaluate the potential benefits and risks
  • Understand who your competitors are
  • Find out if there are any language issues and different payment terms that you’ll need to manage
  • Determine that your product or service is legally exportable and that you’ll be able to satisfy an increase in demand
  • Have an awareness of local customs and practices that may differ to your own
  • Choose markets that have growth potential and a customer need
  • Expansion requires a start-up period, so you need to factor in investment costs
  • As well as enough capital to make the initial investment, have a long-term financial plan in place

  • Assign one or two senior employees to your international effort – as a minimum, someone accountable for export sales and someone who will recruit local talent
  • Consider what your entry mode to market will be:
    • Direct export via your own team or agents
    • Via an intermediate e.g. Distributor, reseller, franchise or joint venture
    • Hierarchal through a subsidiary, direct investment or branch operations
    • If you work with a third party always insist on a formal written agreement between you
  • Choose markets that have growth potential and a customer need
  • How will you transport the goods? The Inco terms agreed will have an effect on your pricing policy

Minimise the risks

Balancing the risks and potential rewards when it comes to exporting is critical for businesses looking to capitalise on new markets.

  • Expanding beyond your domestic market can mean lots of extra paperwork. With a variety of regulations surrounding exports, it is important to know what is required when it comes to international documentation, import VAT, duty, excise or levies
  • Ensure your terms and conditions of sale are fit for purpose, for exports not just the domestic market
  • If you transact business under the terms and conditions/contracts of the buyer the legal jurisdiction/applicable law will be that of the overseas buyer and can be expensive if legal proceedings ever ensue the costs to you in that overseas market can wipe out your bottom line profits
  • Ensure you obtain export trade credit insurance to protect against bad debts and minimise the costs that might ensure where the buyer’s contract takes precedence

  • Selling on open account is the most competitive solution but do not overlook the potential need to sell to certain overseas markets under more secure terms such as letter of credit
  • Decide whether it’s best to price your goods or services in the local currency of the country in which you are trading
  • The volatility of currency markets can be tricky to navigate, so build currency fluctuations into your margins when setting a price. Some currencies are more volatile than others and any movement affecting either currency could have significant consequences for profit margins
  • If you’re trading in a foreign currency, you should protect yourself against foreign exchange risk. You can hedge against exchange rate movements by arranging a forward foreign exchange contract

Expanding your business overseas

Expanding your business overseas

By expanding your business overseas, you can become more efficient and increase your productivity. To find out more, our guide to exporting, ‘Capitalising on New Markets’, provides insights that will help you get your business export-ready and make exports a real asset.

DOWNLOAD | Our guide to exporting

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