With exporting, the stakes are high, so it’s vital to do your homework before taking the plunge.
With a small domestic market in New Zealand, many businesses start to look for new overseas markets.
Growing your business through exports is a risky strategy - fortunately there are resources available.
Here’s what you need to think about before hitting the (overseas) ground running.
1. What’s your value proposition? Having a short statement outlining what is unique about your product is not only a powerful selling tool, it helps you work out whether there’s even an offshore market for it.
2. Which markets will return the most profit? Unsure where to export? Ask yourself these questions: Can you enter the market? Is it a good place to do business? Is there a real opportunity for what you offer? Can you reach your customers easily?
3. Know your market: Get on a plane, visit trade shows, expos and do some digging on your competitors, their pricing and distribution channels.
4. Who will you partner with? Agents and distributors are the most common channel choice for Kiwi exporters but consider an overseas office, selling directly to customers online, licensing or franchising too.
5. Can you handle global growth? Don’t commit to exporting until you’re armed with adequate financial resources, a committed management team and proof your product does well in New Zealand.
6. Do a compliance checklist: Failing to comply with international requirements is risky. Look into product liability insurance, product safety and standards, packaging and labelling, barcodes and tracking, transport, and online compliance. Set aside a budget for these changes to avoid nasty surprises.
7. Will you make a profit? The cost of exporting is different for every business. You’ll need to complete a cash flow forecast and work out your break-even point to see if it’s even viable.
8. What’s your pricing strategy? Work out your costs, ensuring a healthy profit in your final prices, then talk to the experts about which pricing strategy is on point for your business and market.
9. How will you get your product overseas? Think hard about your product, its customer, and where your goods need to go. Then get advice from a professional freight company or customs broker.
10. Can you afford to export? Even established businesses feel the financial strain of exporting. Seek good financial planning advice early on and consider debt funding (loans, leases, overdrafts, terms of trade) or equity funding to finance your offshore activity. Whichever way you go, put some fat in your budget to cover unexpected costs!