New Horizons: Make Exporting Your New Year’s Resolution
The arrival of January often leads to goal setting and self-reflection. As you consider what to prioritize in 2018, make sure exploring exporting opportunities is at the top of your list for your business.
Exporting opens up businesses to not just millions, but billions of new customers around the world. More than 70 percent of the world’s purchasing power and 95 percent of the world’s customers are located outside of the United States. Want more incentive? According to the International Trade Administration, sales grow faster for firms that export than firms that don’t.
By diversifying where you sell products, your company will be better able to weather fluctuations in the U.S. economy. Exporting creates a buffer in case one market is underperforming. It helps mitigate risks during times when economic outlook is uncertain.
Looking at the bigger picture, exporting is an important component of growing Utah’s economy. Selling products to foreign customers means importing money into the state. This leads to job creation and increased prosperity. Utah ranks sixth in the U.S. for export growth over the past decade—an impressive feat for a landlocked state of only three million people.
Exporting may seem like a daunting task for a company who has never sold internationally before. Even the word “exporting” can seem intimidating. Fortunately, World Trade Center Utah has put together “10 Tips to Help You Think, Act and Succeed Globally.”
- Take a Good look in the Mirror
Look within your company to see if you are ready to meet the challenges of exporting. Conducting a thorough evaluation of your company will help you develop a well-structured plan of action moving forward. Before jumping on the global stage, you should ask yourself the following:
- Why do I want to export?
- Do I have a marketable product?
- Do I have the capacity to compete in a global market?
- Identify Resources
Many resources are available to help you succeed in your international expansion. WTC Utah and its partners can help you find mentors, identify service providers and locate helpful information for entering new markets. Below is a list of organizations that can help you grow globally:
- World Trade Center Utah, wtcutah.com
- S. Commercial Service, www.export.utah.gov/utah
- The Small Business Administration, sba.gov/offfices/district/ut/salt-lake-city
- Small Business Development Centers, utahsbdc.org
- Learn the Lingo
When conducting business overseas you may hear shipping, government or business terms you are unfamiliar with. Like any new endeavor, exporting requires research so you can adequately speak the international business language and give your product the greatest chance of success.
- Who Wants What You’ve Got?
Hundreds of factors, including price, culture, climate, age and lifestyle play into a consumer’s purchasing decisions. To determine which overseas markets your business should expand into, you must first determine who your customers are and identify locations with the greatest demand.
- Know the Rules of the Game
Become aware of laws, regulations and procedures for your product or service in specific overseas markets. Organizations that regulate trade will help you know if the countries you are considering have embargoes or sanctions that might prohibit you from exporting. Once you become familiar with the organizations that regulate trade in your chosen area, you need to classify your product. This will help you know what type of license(s) you need to obtain from agencies such as the U.S. Department of Commerce and U.S. Department of State.
- Leverage Existing Platforms
A brick-and-mortar business has limited access to customers, but online markets provide access to billions of potential consumers. To ease into the online world, you can start by selling your products on existing online platforms that will give you access to customers immediately. As demand grows, you can create your own online store which will allow you to retain more of the profit from your sale.
- Grow as You Go
Utilize trade shows and trade missions to explore markets, test demand and meet potential partners. Trade missions and trade shows can be beneficial for any company considering international expansion. Visit www.wtcutah.com to view the 2018 trade mission/trade show schedule.
- Choose Partners Carefully
Finding the right partner can make or break your international expansion. Identify partners who can help develop your strategy, manage market entry and handle in-country representation.
- Limit the Culture Shock
Understand the differences in culture and customs for your markets in advance. Psychologist Geert Hofstede’s research on cultures, referred to as Hofstede’s Cultural Dimensions, can help provide context into the differences in cultural practices and how to navigate them. Learning about cultural nuances can help you avoid faux pas and build relationships.
- Make Money!
Maximize your profits by understanding export costs, the skill of payment negotiation and how to get paid on time. Being able to understand and negotiate how you will receive money for your exported goods is essential to ensuring you are paid in full and on time.
To learn more about each of these topics, sign up for the WTC Utah newsletter at www.wtcutah.com. The newsletter includes regular articles that take a deeper look at each one of the “10 Tips to Help You Think, Act and Succeed Globally.”