Cont….
5. Enter the market.
The research is complete and the export and marketing plans have been devised. You feel ready to enter the market and are seeking the best strategy to reach potential customers. There are as many market entry strategies as there are markets; however, these strategies can be loosely grouped into three categories. Direct exports, as the name implies, involve direct marketing and selling to the client. In a reasonably accessible market such as the United States
Indirect exporting is frequently used to enter new markets. Businesses selling products enter into an agreement with an agent, distributor or a trading house for the purpose of selling (or marketing and selling) the products in the target market. Due diligence is critical when selecting an agent or distributor for indirect exporting. Western Economic Diversification Canada has published a valuable checklist on selecting a foreign agent or distributor in its publication Ready for Export: Building a Foundation for a Successful Export Program. An adaptation of this checklist is found in Team Canada Inc’s A Step-by-Step Guide to Exporting (see below for more information).
The third market entry strategy involves strategic partnerships with other companies or individuals with complementary skills and capabilities. A partner can often provide the insight, contacts and expertise that fills the gap in your export readiness. A strategic alliance with a company selling a complementary product or service can provide more effective market access, resulting in more foreign sales in less time. As with indirect exporting relationships, contractual agreements with partners must be stated in clear terms and, whenever possible, refer to Canadian laws for the protection of the Canadian company.
Continue on to the next page for steps six through ten of successful exporting.
Here are more of the key steps necessary to export your products or services successfully:
6. Get your product or service to market.
Every market has its own set of rules and regulations covering safety, health, security, packaging and labeling, customs and duties among other things. Additionally, these rules and regulations may vary depending on the product or service you are exporting. It is critical that you understand the rules and regulations that apply to you before you ship your goods or open your foreign business location. Product-based businesses with shipping requirements will benefit from developing a relationship with a freight forwarding company and a customs broker. Whether you are shipping by truck, rail, sea or air, the documentation will likely be extensive and potentially confusing. The services provided by these businesses will assist you in determining the most efficient and least risky options for shipping your goods across borders.
7. Explore financing options.
While there are overnight export success stories, most companies must be prepared to invest both time and financial resources to see the return on their investment and the subsequent success. Consequently, financial stability and a secure cash flow are important during this period. In some cases, businesses can rely on their domestic sales to sustain their early export efforts. If this is not possible, it is a good idea to know what financing options are available. Exporters must develop a financial plan to understand and address the diverse costs associated with exporting, complete with a two- to three-year cash budget to cover expenses and a capital budget. A capital budget is a cost-benefit assessment of your export objectives and serves as your operating plan for measuring expenditures and revenues.
8. Understand the legal and regulatory issues.
Exporting exposes Canadian businesses to unfamiliar laws and regulations. There are numerous international conventions, treaties and national, regional and municipal rules that can affect your ability to operate successfully in foreign markets. Exporters may also encounter disputes with agents or distributors, clients or creditors. It is important to understand your rights and obligations when resolving disputes, selling goods or services and protecting intellectual property.
9. Put it into practice.
You have committed yourself to exporting. You have the skills and the resources to undertake the challenge. You have researched the market and prepared your export plan, international marketing plan and financial plan. Your market entry strategy is clear and the support system (i.e. freight forwarder, customs broker, financial lenders, legal advisors) is in place. You have gone through the export process step-by-step and feel confident that you have covered all the bases. Now, it is time to put all this skill and knowledge to use. The world is waiting for your product or service!
10. Let Team Canada Inc (TCI) help you along the way.
TCI is committed to helping businesses across the country thrive in global markets by offering comprehensive export information and services. These tools are designed to help both experienced exporters and potential exporters plan and implement their international business ventures from start to success.
This information is drawn from the Team Canada Inc. guide, A Step-by-Step Guide to Exporting.
