As a business owner find ways to grow is exciting but can also be stressful. Exporting goods to other countries is an exciting step that comes with both benefits and risks. Here’s some information to help you make the right decision for your business.
The Benefits
Business Growth
Expanding your business to overseas markets opens your business to an increase in sales, revenue and growth.
Diversify and Reduce Dependency
Having all your eggs in the one basket is not the best idea and selling your products in different markets can reduce the dependency you may have on one particular market.
Increase in Competitiveness
No doubt you will learn a lot when exporting, including new marketing techniques and gaining insights from new customers. These new techniques and insights can help you further develop and improve your product and be more competitive.
The Risks
Not protecting your IP
Your intellectual property (IP) is one of your key business assets. While you have your IP (your business name, logo and product) registered in Australia, don’t forget to also register it in the country you are exporting to. No only will this process protect your IP, the process of doing this will also highlight if other businesses in the selected country already have something registered that impacts your business and product. So for the country you want to export to look up what IP system is used and get all that sorted before you begin exporting. IP Australia will have some helpful insights and resources on applying for IP overseas.
Not Understanding Local Cultures and Customs
Not understanding local cultures and customs not only applies to how you do business in a new market, but how your product will go in that market. Get it wrong and it’ll negatively impact your business.
Before exporting goods to a new market consider:
- Is your product right for that market?
- Is there anything about your product or your business that might offend local cultures? For example, the name, colour or type of product.
Missing Hidden Costs
When exporting to a new market if you don’t plan for all scenarios and costs, it will negatively impact your business. For example, it’s important to plan and budget for:
- Legal advice from lawyers and IP experts.
- Increase in marketing costs.
- Costs related to export documentation, paperwork and shipping.
- Cost of additional staff to handle the increased workload and output.
- Making changes to your product, packaging or business following your review of the local culture and customs.
- Costs if you have to travel to the country or countries you are exporting to.
- Any other costs your research uncovers.
Lack of Resources
The increase in sales and business growth is great, but if you don’t have the resources to keep up with the increase in demand then you’re setting yourself up to fail. Research, forecast and plan ahead!
Getting the Documentation and Paperwork Wrong
It’s vital to have the right documentation and paperwork and meet all compliance and legal requirements. If you don’t dot every i and cross every t it can cost you money, time, product and customers. So make sure you have the right information from the right sources. For example, the Australian Government’s Austrade and the Government of the country you want to export to. Export Pallets have a helpful article about what you need to know before you start exporting.
Now the list of risks may seem like much more than the benefits, but if you do your research, plan head and get it right before you start exporting goods, you can mitigate the risks and enjoy the benefits.
Source: Export Pallets