There are many factors to consider when building an export arm to your business. We know that, particularly in SME’s, export market development is often left to the business owner or CEO along with all other business responsibilities. For this reason, export doesn’t get the time or attention that it needs to be become a sustainable and profitable channel.
Exporting is an area that needs focus – it’s not something that can run itself, and with strong demand in nearby export markets, it certainly should not be viewed as a short-term venture. There are numerous factors that businesses must address to take advantage of the export opportunities. Let’s review the main points.
Expertise: Lack of expertise and the failure to hire or train the right people is often described as the biggest barrier to building a successful export business. While most SME’s may not be able to initially afford an experienced export manager, many have the capable staff to take on this responsibility with the right training and support. Never miss an opportunity to attend export workshops that are specific to the food & agribusiness industry and markets of interest, especially if they are being delivered by reputable industry leaders. If your budget permits, engage experienced advisors to help you start your export journey on the right footing. Support is available and almost always cheaper than learning from costly mistakes and misadventure.
Cashflow: As with any business, it’s essential to know whether you have the cash flow available to fund exporting. There are start-up costs such as travel, labelling changes, product registration, market-specific marketing material etc. And further, down the journey, there will be promotional costs, staff hire, maybe even in-market representatives. While there are grants to help with this, businesses will need to allocate a budget to get into export. In addition, some products can command pre-payments while others will need to provide payment terms as an added incentive. This means you need to have some way to ensure you’ve still got the funding to produce your goods while waiting to be paid.
Time: Exporting requires a long-term approach to ensure success. It’s not something that can be done in a matter of weeks and investing only a few hours a week; it requires ongoing planning, marketing, and minimum 3-year time frames so that you know what you are working towards.
Management & Staff Buy In: As with any changes you make to your business, you need to have both management and staff on board. Once you’ve done your research and made the decision to start exporting, you need to take the time to speak to your staff and explain ‘the why’ behind it as well as the benefits. This is especially the case with operations teams – export orders often start small and require some adaption, something that the production and logistics teams will typically want to avoid. Explaining the advantages of export can go a long way to avoiding resistance from within.
Production Capacity: One of the more important things to consider when exporting is whether you have the production capacity to meet anticipated export demand. If your entire capacity is taken up producing goods for the domestic market, you need to work out how you can increase that to supply export orders within agreed lead times before you start pitching to international buyers.
Adaptation: Are you ready to adapt to the marketing, labelling and regulatory requirements in a new country? Do you need to adapt your flavours or do consumers want the flavour of the Australian product? Does the market prefer smaller packaging? Does the product need to be certified for cultural reasons such as halal, kosher etc? You must be aware of all these points and prepared to adapt where possible to ensure that your product a) can be imported into your preferred markets and b) you can grow sales in that export market.
Market Access & Licensing: On top of adaptation, is your product allowed in the market in its current form? Are any of the ingredients banned? Does your product need to be licensed, accredited or registered? Does your product category attract a high tariff that will make it uncompetitive? Do you need to prepare specific documentation for shipping and customs clearance purposes that you wouldn’t ordinarily produce for the local market? Undertaking thorough research is the key to avoiding any costly oversight.
Travel: While the pandemic has halted international travel, for now, one thing is for certain – whatever product you export, you will be expected to travel. Whether it is for trade shows, meeting the buyers and doing your research by walking the supermarket aisles, travel is a constant factor that you should be scheduled into your budget.
Logistics: Logistics becomes much more complicated when dealing with exports. While you might currently deal with getting your products across borders, when it comes to international shipping, you need to start dealing with insurance, sea or air freight, customs and more. Even finding a freight forwarder that’s right for your business and products can at times be a challenge.
Legal Implications: It’s worth sitting with a solicitor and your industry body to get more information on the legal implications to exporting to various countries. IP protection, trademarks and distributor agreements are the most common points to consider.
There’s plenty involved when it comes to exporting successfully, and you need to ensure your business is fully aware at the earliest possible moment. Export Connect delivers a highly rated online export masterclass that you can join and receive insights on how to develop a profitable and sustainable export business. Click below to find out why 100% of masterclass participants recommend the Export Connect masterclass to industry peers, or connect with us to discuss how our tailored services can prepare you for export success.
