Exporting is crucial to America's economic health. Increased exports
mean business growth, and business growth means more jobs. Yet, only a
small percentage of potential exporters take advantage of these
opportunities. It is critical for U.S. businesses to think globally. Your
decision to read this book indicates an interest in exporting. However,
you may have discovered your company is already competing internationally
-- foreign-owned companies are competing with you in your "domestic"
markets. The division between domestic and international markets is
becoming increasingly blurred. Your business cannot ignore international
realities if you intend to maintain your market share and keep pace with
your competitors. Making the export decision requires careful assessment
of the advantages and disadvantages of expanding into new markets. Once
the decision is made to export, an international business plan is
essential. This chapter presents the advantages and disadvantages of
exporting and offers a sample business plan.
ADVANTAGES AND DISADVANTAGES OF EXPORTING
Consider some of the specific advantages of exporting.Exporting can
help your business:
. enhance domestic competitiveness
. increase sales and profits
. gain global market share
. reduce dependence on existing markets
. exploit corporate technology and know-how
. extend the sales potential of existing products
. stabilize seasonal market fluctuations
. enhance potential for corporate expansion
. sell excess production capacity
. gain information about foreign competition
In comparison, there are certain disadvantages to exporting.Your
business may be required to:
. develop new promotional material
. subordinate short-term profits to long-term gains
. incur added administrative costs
. allocate personnel for travel
. wait longer for payments
. modify your product or packaging
. apply for additional financing
. obtain special export licenses
These disadvantages may justify a decision to forego exporting at the
present time. For example, if your company's financial situation is weak,
attempting to sell into foreign markets may be ill-timed. On the other
hand, some companies have been successful selling abroad even before they
have made any sales domestically:
Landmark Systems of Vienna, Virginia, had virtually no domestic sales
before it entered the European market. Landmark had developed a software
program for IBM mainframe computers and located an independent distributor
in Europe to represent their product. In their first year, 80 percent of
their sales were attributed to exporting. In their second year, sales
jumped from $100,000 to $1.4 million -- with 70 percent attributable to
exports.
As you can see, there are no hard-and-fast rules as to which
businesses should export, and which should not. In the case of Landmark
Systems mentioned above, a foreign distributor produced results before any
significant domestic sales occurred. Landmark Systems' decision to export,
like that of many other small business exporters featured in this guide,
was based on careful planning.
THE NEED FOR AN INTERNATIONAL BUSINESS PLAN
Behind most export success stories is a plan. Whether formally
written down, or sketched out informally at a meeting of your management
team, an international business plan is an essential tool to properly
evaluate all the factors that would affect your company's ability to go
international.
An international business plan should define your company's:
. commitment to international trade;
. export pricing strategy;
. reason for exporting;
. potential export markets and customers;
. methods of foreign market entry;
. exporting costs and projected revenues;
. export financing alternatives;
. legal requirements;
. transportation method; and
. overseas partnership and foreign investmentcapabilities.
Creating an international business plan is important for defining your
company's present status, internal goals and commitment, but is also
required if you plan to seek export financing assistance. Preparing the
plan in advance of making export loan requests from your bank can save time
and money. Completing and analyzing an international business plan helps
you anticipate future goals, assemble facts, identify constraints and
create an action statement. It should also set forth specific objectives,
an implementation timetable and milestones to gauge success.
mean business growth, and business growth means more jobs. Yet, only a
small percentage of potential exporters take advantage of these
opportunities. It is critical for U.S. businesses to think globally. Your
decision to read this book indicates an interest in exporting. However,
you may have discovered your company is already competing internationally
-- foreign-owned companies are competing with you in your "domestic"
markets. The division between domestic and international markets is
becoming increasingly blurred. Your business cannot ignore international
realities if you intend to maintain your market share and keep pace with
your competitors. Making the export decision requires careful assessment
of the advantages and disadvantages of expanding into new markets. Once
the decision is made to export, an international business plan is
essential. This chapter presents the advantages and disadvantages of
exporting and offers a sample business plan.
ADVANTAGES AND DISADVANTAGES OF EXPORTING
Consider some of the specific advantages of exporting.Exporting can
help your business:
. enhance domestic competitiveness
. increase sales and profits
. gain global market share
. reduce dependence on existing markets
. exploit corporate technology and know-how
. extend the sales potential of existing products
. stabilize seasonal market fluctuations
. enhance potential for corporate expansion
. sell excess production capacity
. gain information about foreign competition
In comparison, there are certain disadvantages to exporting.Your
business may be required to:
. develop new promotional material
. subordinate short-term profits to long-term gains
. incur added administrative costs
. allocate personnel for travel
. wait longer for payments
. modify your product or packaging
. apply for additional financing
. obtain special export licenses
These disadvantages may justify a decision to forego exporting at the
present time. For example, if your company's financial situation is weak,
attempting to sell into foreign markets may be ill-timed. On the other
hand, some companies have been successful selling abroad even before they
have made any sales domestically:
Landmark Systems of Vienna, Virginia, had virtually no domestic sales
before it entered the European market. Landmark had developed a software
program for IBM mainframe computers and located an independent distributor
in Europe to represent their product. In their first year, 80 percent of
their sales were attributed to exporting. In their second year, sales
jumped from $100,000 to $1.4 million -- with 70 percent attributable to
exports.
As you can see, there are no hard-and-fast rules as to which
businesses should export, and which should not. In the case of Landmark
Systems mentioned above, a foreign distributor produced results before any
significant domestic sales occurred. Landmark Systems' decision to export,
like that of many other small business exporters featured in this guide,
was based on careful planning.
THE NEED FOR AN INTERNATIONAL BUSINESS PLAN
Behind most export success stories is a plan. Whether formally
written down, or sketched out informally at a meeting of your management
team, an international business plan is an essential tool to properly
evaluate all the factors that would affect your company's ability to go
international.
An international business plan should define your company's:
. commitment to international trade;
. export pricing strategy;
. reason for exporting;
. potential export markets and customers;
. methods of foreign market entry;
. exporting costs and projected revenues;
. export financing alternatives;
. legal requirements;
. transportation method; and
. overseas partnership and foreign investmentcapabilities.
Creating an international business plan is important for defining your
company's present status, internal goals and commitment, but is also
required if you plan to seek export financing assistance. Preparing the
plan in advance of making export loan requests from your bank can save time
and money. Completing and analyzing an international business plan helps
you anticipate future goals, assemble facts, identify constraints and
create an action statement. It should also set forth specific objectives,
an implementation timetable and milestones to gauge success.
Source : foreign-trade.com
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