MONDAY EXPORT CLASS
With GODWIN OYEFESO (SUCCESSEDGE EXPORTERS NETWORK)
Topic: WRITING AN EXPORT BUSINESS PLAN (PART 2)
Three Types of Export Business Plans
Now you’re ready to get organized and create your own plan. To keep the process manageable, let’s look at three different types of sample template plans, each with distinct advantages for business people with different needs. Pick the one that works best for you, keeping in mind that you can shorten the analysis while keeping the major components of the plan intact.
• The back-of-the-napkin export business plan (suitable for born-global entrepreneurs)
• The traditional-export business plan
• The Laurel export business plan
The Back-of-the-Napkin Export Business Plan
The back-of-the-napkin export business plan is for folks who are big on ideas and pressed for time and want to get to market fast. While it’s typically short and sweet, it serves a better purpose than having no export business plan at all. A back-of-the-napkin export business plan can be as simple as explaining what the business does, what you want to do next export-wise, and how you are going to get there (who is going to be on board). It might look like this:
- “We make the absolute best purple widgets on the planet.”
- “We will export purple widgets.”
- “We will export purple widgets to France.”
- “We will consider making other type widgets, say in red, if a customer in France is large enough to justify the change.”
- “Suzy, Ted, Mike, and I will work on this initiative.”
- “We will export, at a minimum, twenty thousand purple widgets within the first year.”
- “We will not reduce efforts from our domestic business to apply them to the export business.”
- “We will figure out how much money we need and when we need it.”
- “We will finance the exports of purple widgets with profits from our domestic business.”
10 . “We will find our own customers directly via our Web site, blog, and Facebook.”
11 . “We will consult with our banker to provide payment options on all export sales.” - “We will have fun in the export journey to success!”
Add a Web site link to show what the business does and provide an executive summary that includes the founder’s bio and the key team members, and you’re done.
The Traditional Export Business Plan
It’s important to have a business plan, but you don’t have to reinvent the wheel to create one. One place to visit and bookmark online is the Small Business Administration’s “Export Business Planner” It is a free, customizable tool for small-business owners who are exploring exporting. When you are using the planner, you can refer to Getting Started: Creating an Export Business Plan. It outlines the following: - Profiling Your Current Business
a. Identify current successes.
b. Determine competitive advantages.
c. Evaluate companywide commitment. - Conducting an Industry Analysis
a. Find export data available on your industry.
b. Research how competitive your industry is in the global markets.
c. Assess your industry’s international growth potential.
d. Research government market studies. - Identifying Products with Export Potential
a. Select the most exportable products/services that your company will offer internationally.
b. Evaluate the product/services(s) that your company will offer internationally. - Marketability: Matching Your Product/Service with a
Global Trend or Need
a. Classify your product.
b. Find countries with the best-suited markets for your product.
c. Determine which foreign markets will be the easiest to penetrate.
d. Define and narrow down those export markets you intend to pursue.
e. Talk to your US customers or other companies who are doing business internationally.
f. Research export efforts of US competitors. - Determining Market Expansion Benefits/Trade-Offs
a. Assess the benefits to exporting.
b. Determine the trade-offs to exporting. - Identifying Markets to Pursue
a. Select the top three most penetrable markets (see the sidebar at the end of this list). - Conducting an Export Marketing and Sales Analysis
a. Come up with an overall marketing strategy.
b. Figure out sales strategies.
c. Write a detailed product or service description.
d. Map out the product life cycle.
e. Make a list of copyrights, patents, and trade secrets.
f. Determine research and development activities. - Determining Expansion Needs
a. Access available export financing resources.
b. Determine which financing method is best suited to your exporting needs (refer to Chapter 20 for more details). - Short- and Long-Term Goals
a. Define short-term goals.
b. Define long-term goals.
c. Develop an action plan with timelines to reach your short-term goals.
In summary, the most difficult aspect in developing an export business plan is determining the demand for a product or service offering in a foreign country. It’s one thing to know a product can be sold in a market—after all, that’s why you selected a particular market—but it is a totally different ball game when it comes to forecasting how much you can sell and over what time frame. Assume that the demand for a product develops in direct proportion to the economic development in each country. This might be a useful way to think about it, especially when data might be unknown. What is crucial is that you have thought through the key drivers of the export venture’s success or failure—from what level of sales at which the business begin to make a profit to the impact of using various methods of distribution channels.
■ Note A n overseas market is as mercurial as it is unpredictable. Who would have guessed that a community marketplace for people to list, discover, and book unique accommodations around the world would sell? *WHERE DO YOU WANT TO GO?*
Keep your analysis of markets that you want to pursue to one page and break it into four manageable parts (use a, b, c, and d below). The purpose of this exercise is to establish a broad scope for your research-market analysis but not so broad that you overwhelm yourself. Try to begin with the end in mind: where do you want to go and how will you know that you have arrived?
A . S elect the top three most penetrable overseas markets that appear to have the best potential for your product or service offering. You can conduct market research online; meet in person with an international trade expert or test your product or service by exhibiting at a local trade show. Trade shows give you access to potential customers from all over the world without you having to analyze a thing. For example, if you sell hardware tools and exhibit at a hardware show and find that you get a lot of interest from attendees from a particular foreign market, such as Australia, you would know there must be a market there, because why else would these attendees be asking for information? From there, you can address those inquiries, learn as you grow, and conduct further research.
B . Analyze the market factors and conditions in each of the selected countries. Delve into each country further by reviewing cultural attributes, geographical characteristics, political stability, demographic characteristics, market size, and growth rates. The goal here is to conduct a sound assessment of a foreign market. What might the barriers be? What makes it a good market to enter? How will the local culture influence the sales of your product or service offering? Such in-depth market research information is necessary to make sound marketing decisions, and it must be done with each new market entry.
C . Determine the pros/cons to conducting business in each market. Look at potential language barriers, legal restrictions, logistical challenges, and payment problems that might get in the way of doing business in a particular market. Include all relevant variables in your assessment. Do an analysis of your company’s own strengths and weaknesses in a selected market. Will your product or service offering be at the low-, middle-, or highend pricing level? Is there a similar product or service offering currently available in the selected market? If so, who is making it? Where are they based? Can you compete? Why would you? How would you? The more pros you have for entering a new market, the better your chance for success. If you can draw on the perspective of a native (better yet, an actual prospective customer) of the country where you are keenly interested in doing business, do so. Nothing beats an on-the-ground assessment.
D. Select one market to get started! Now you are ready to interpret your findings in light of the stated objective: where do you want to go and how will you know that you have arrived? (This gets back to the back-of-the-napkin plan.) At this juncture, you should have enough data and experience (from going to trade shows, for example) to decide which market is best for you to begin in. Hold off on the other two countries and don’t start doing business with them until after you have a proven success with the first overseas market. If the first selected market doesn’t work right away, say after six months or a year, move on to market No. 2, and so on. Don’t muddy the waters. You don’t want to do too many things at once, because it’s not cost effective and you will end up not doing any of them right.
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TO BE CONTINUED
For More details on the topic treated today, you can get Our New Book “SECRETS SUCCESSFUL EXPORTERS HIDE FROM POTENTIAL EXPORTERS” would give you more tips and insight on the exporting world.
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Till then, you will succeed
ELEF 