Is my product ready for export?10.09.2023 | 23:30 |
On the platform developed to support micro, small, and medium-sized enterprises (MSMEs) - Trade4MSMEs website – the Export Readiness Assessment Guide(Guide) is provided. The first questions the Guide addresses is “Why Export? What are the benefits?”
The research, mentioned in the Guide, shows companies that export are more profitable, more productive and more innovative than those that do not. Research has shown that businesses are 11% more likely to survive if they export. The reasons for this range from spreading export risk amongst different country markets, to increasing turnover and improving innovation by developing specific services for specific overseas markets. And, there are some reasons provided why one should start thinking about exporting:
1. Increased Sales – If you are selling well in your own home market, and your service is in demand, exporting is a way to develop new additional sales in other countries. If your services are in demand at home, then there is likely to be significant demand in foreign markets.
2. Higher profits result from increased sales – If you can cover fixed costs through domestic operations or other types of financing, your export profits can grow very quickly.
3. Economies of scale – You can benefit from the cost savings when you produce and sell more services. The benefits from the economies of scale can be very advantageous.
4. Global competitiveness – The experience your company gains internationally will help keep you competitive in both your home market and in the global marketplace.
5. Domestic competitiveness – Successful exporting companies are often more resilient to potential foreign competition.
6. Reduced risk – If you can sell into several different countries, you are spreading the risk. If you diversify into international markets, you avoid depending on a single marketplace and suffering from any domestic instability.
7. New knowledge & experience leads to innovation –The global marketplace abounds with new ideas, approaches and marketing techniques that could also prove successful in your home market. Adaptations to your service for example leads to new innovations and new service development.
Trading internationally not only helps with all of the above, in addition trading globally can boost your company’s profile, reputation and credibility.
The next question the Guide discusses is: “Is my business export ready?”
It is said that we live in an increasingly interconnected world, which means that businesses of all sizes might receive enquiries from buyers in other countries. An export-ready business is one that has the capacity, resources and management to deliver a marketable service on a global scale at a competitive price. To determine if your business is ready to export internationally you can do your own export readiness assessment.
The Guide also provides a check list of the following areas to consider:
Set clear and achievable export objectives. Develop an Export Plan.
Understand your service USPs (unique selling points) in export markets.
Formulate a realistic idea of what exporting entails and create a timetable for results.
Understand what is required to succeed in the international marketplace.
Confirm you have staff in place with the knowledge and skills to trade internationally or are willing to learn
Is finance in place to help scale up for export?
Undertake market research and decided on the best international target markets. These could be neighbour countries who are part of a trading bloc or developed countries with large populations and large purchasing power.
Understand international marketing requirements.
Research your competitors – both international competitors but also competitors based in the country which you want to export to.
Considered any adaptations that may be required.
Understand any cultural and language needs.
Research your market entry strategy how, and to whom you will sell to in the export markets: Direct sales to a business or consumer / Intermediary representatives / licensing / foreign direct Investment through establishing a company in your target export market
Understand destination country regulations, export and import documentation, customs requirements and procedures.
Guide also suggests using export readiness assessment tools.
There are many tools in the world aimed at checking whether a product is ready for export. However, the decision on readiness for export remains with entrepreneurs. Based on all of the above, we can conclude that before the start of export, you need to do your “homework” about your readiness for a new type of activity of your enterprise. It will help you determine your basic needs and your level of capability.
This publication was prepared by USAID’s Trade Central Asia activity, as a part of the Export Ecosystem Development Initiative in cooperation with the Orient Information Portal.