Why Plan?
If you plan your export venture with care and thoroughness, you have a better chance of success in your target markets and the opposite is also true. Financial institutions and other lending agencies know this and will not provide funds to a business that lacks a well-developed export plan. Before you can develop your export plan you need of course a current and comprehensive business plan that re- flects your domestic operation. If you have one but it’s out of date you have to review and renew it. If you don’t have one you need to create one.
You can then move to create your export plan. It identifies your target markets, export goals, necessary resources and anticipated results. In the introduction, you should provide information on the history, location and facilities of the business, its vision and mission statements. In addition, the goals and objectives of the organization, an overview of the international market and the purpose of the export plan should be included.
As to organisational issues, ensure that you have buy-in from management and that your employees know what they need to do to meet your exporting objectives. Take into account how the relationship between exporting and other operations will work in harmony and include any company experience in or knowledge of exporting, strategic alliances and labour market issues.
Products and services
When describing the key features of your products and services, pay attention to the needs and wants of your export target markets. For example, consider adaptation and redesign required to address cultural differences and foreign consumers’ needs, how language barriers may impact on labelling requirements, and buyers’ preferences, such as colours and packaging that appeal to foreign buyers. In addition, you should also consider how your product may be impacted by engineering standards and measurements, geographic and climactic conditions – such as topography, sea level and humidity – that may affect the performance of your product, and the comparative advantage of your product over domestic brands in your target market.
Market overview
This shows that you understand your market and do adequate research. Keep in mind that commerce is a very “cultural” activity; customs such as religion and language have a major impact on how people do business. You should therefore focus on the factors such as the political and economic environment, competitors, the size of the market and key market segments, purchasing processes and buying criteria, descriptions of industry participants, tariff and non-tariff barriers, industry trends and other market factors, and market outlook.
Market entry strategy
Clearly indicate how your company plans to enter the market. For instance, will you use a foreign distributor or sell directly to end-users? You should also describe your promotional strategies and sales processes. State any strategic alliances that will help you enter your market, whether they will help you handle logistics, distribution or promotion. You can include a description of your target markets, an analysis of your competitive position, information on product positioning, your pricing strategy and terms of sale, a distribution strategy, promotion strategy, and description of intermediaries and partners.
Regulatory and logistical issues
Many countries are trying to standardize their laws and regulations to encourage international trade, but discrepancies still exist. Be sure to consider intellectual property protection, modes of transportation and cargo insurance, trade documentation requirements, health and environmental regulations, particularly in sectors such as food products, prescription drugs and chemicals, and language, labelling and consumer protection laws.
Financial plan
Back up your information with a strong financial plan, particularly in areas such as export financing. Here you should assess the potential costs of exporting, as well as your expected revenues. You should therefore develop an export budget, which includes such aspects as product adaptation and redesign costs, consulting fees, marketing costs, travel expenses, distributor commissions, logistics-related costs and all other costs that will affect your bottom line. You should also show your financing options, state how you will handle the costs of expanding, purchasing equipment and streamlining your operations, demonstrate how you will collect payment, and assess your cash flow and working capital in the context of longer sales cycles and longer payment terms.
Risk factors
Doing business in lesser known territory with different rules and regulations inevitably poses more risk than operating at home. Show lenders that you’ve addressed risk by providing a customer credit check and obtain insurance for your sales. In your export plan, you should discuss market risks, such as economic instability and political changes, and credit and currency risks.
Implementation plan and timetable
It’s a good idea to reiterate your objectives and show how you’ll meet them within a specific timeframe. Be sure that you develop both short-term objectives (3-9 months) and longer term objectives (1-2 years), show what you intend to achieve in sales demonstrate how you will evaluate and measure your results against your objectives, and provide an action plan and outline responsibilities of specific team members.
Source: www.exportsource.ca.
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