New To Exporting
Posted Under: News
Five Tips for New Exporters
There are about 32 million businesses in the United States. But just a tiny fraction of them were exporters in 2019—about 286,000, according to new data released by the U.S. Census Bureau in November.
In other words, there are millions of businesses across the U.S. that could potentially sell products internationally, but remain strictly domestic. Yet the benefits of selling overseas are clear, even for a successful business in the U.S. market: Exporting can help grow revenue and profits.
Becoming an exporter can seem daunting, but it’s easier than you might think. The export process has become easier in recent years thanks to the internet, better logistics services and export assistance programs made available by the U.S government and other organizations.
Here are the basics on how to seize opportunities overseas before a competitor does.
1: Do Your Homework
To succeed overseas, you can’t just replicate how you do business here in the U.S. Becoming an exporter requires research about potential markets and careful strategizing.
Here are some first steps to start tackling the learning curve. Learn which countries are leading suppliers or leading importers of the types of products your business sells. Understand which countries have the lowest duties and where potential competitors might be. Know that selling in new markets will require unique marketing plans. And finally, sweat the small stuff, such as labeling requirements in certain countries.
2: Make a Focused (but Flexible) Plan
Targeting a bunch of different foreign markets as you launch your export business is probably the wrong way to go. Don’t take a scattershot approach, and don’t shoot for the moon—stay practical.
Many U.S. exporters begin in just one overseas market, and then build on success there in additional markets. For example, consider focusing on Canada while remaining mindful of tariffs and regulations put in place by the United States-Mexico-Canada Agreement.
A thoughtful and strategic exporting plan is key to success. That said, flexibility is crucial as well: be ready to change your plan. The reality is that unexpected roadblocks and opportunities will crop up. Or changing foreign market conditions may necessitate a pivot in focus and strategy. This is a normal part of the exporting process.
3: Leverage Government Assistance
Don’t embark on your business’ exporting journey alone: take advantage of government resources in place to help new exporters succeed in specific foreign markets. These valuable resources exist to help you manage export risks by understanding the new territory you might move into.
The U.S. Commercial Service is a global network of trade professionals offering on-the-ground support in many overseas markets to U.S. exporters. It can help you find new business partners overseas and address market challenges, for example. Find the Commercial Service office nearest you here.
Working with the ExIm Bank (Export Import Bank of The United States) can provide assistance with mitigating non-payment risk, among other benefits.
Also consider connecting with your local economic development office or Small Business Development Center.
4: Create a Team of Experts
To be successful overseas, you’ll need to lean on the expertise of specialists in things like international contracts, foreign currency and exchange rates, export documentation and letters of credit.
It’s important to develop some in-house expertise to support your export strategy, but you can also outsource some expertise. For example, a financial services company such as GreenShootsFX can provide multi-currency accounts that obviate the need for international bank accounts. Other services can help manage risks relative exchange rate volatility.
5: Be Patient
Finally, remember that becoming an exporter isn’t like flipping a switch. It requires a commitment of time and resources. It can take a few years to find footholds in overseas markets, and there may be mistakes initially. This is normal.
Business leaders should understand all this from the outset, and work to get all important internal stakeholders on board with the export plan. Talk through the implications of exporting with the IT team, for example—establishing a solid web presence in a target country is crucial to success. When setbacks occur, everyone needs to remain committed to the export strategy.