There are many factors to consider when building an export arm to your business. We know that, particularly in SME’s, exporting is often left to the business owner or CEO to take care of. It’s left on their lap, along with all other business responsibilities and doesn’t get the time or attention that it needs.
For businesses, there really needs to be a focus on some of the factors that contribute to sustainable export success. Exporting is an area that needs focus – it’s not something that can run itself, and with strong demand in nearby markets, it certainly should not be viewed as a short-term venture.
Factors for Sustainable Export Success
There are numerous main factors that businesses need to be prepared to deal with. Let’s take a quick overview.
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 to as 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: As mentioned earlier, 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 5-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 made the decision to start exporting and done your research, you need to take the time to speak to your staff and explain ‘the why’ behind it as well as the benefits.
Production Capacity: One of the more important things to considering when exporting is whether you have the production capacity to meet the supply demands. 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.
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?
Market Access & Licensing: On top of adaptation, is your product allowed in the market in its current form? Are there ingredients that are 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 wouldn’t ordinarily produce for the local market?
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.