It’s not simply enough to want to sell your products internationally; you should also be prepared for this new business venture. Here are some tips to help determine if you’re export ready.
Plan, Plan, Plan.
While most people don’t relish the idea of writing a 25-30 page business plan, if you are venturing into new markets, a well researched business plan will guide you through the process and save you a lot of headaches. If done right, your business plan should be able to tell you if there is a market for your product, how to best get into the market, how much it is going to cost you, and how much you should profit.
Be Prepared for Border Crossing Costs.
How much is it going to cost to get your product across borders? In addition to the regular cost of doing business, international trade can also include international freight costs, customs brokerage fees, export insurance, and agent’s fees or commissions. Some additional indirect costs include translations of labels, travel costs and currency conversion costs.
Remember, the Government is on Your Side.
The Department of Foreign Affairs and International Trade has nearly 150 Trade Commissioners posted in foreign cities (as well as 17 in Canada) to promote the export of Canadian goods. The Trade Commissioners can help with directories and manufacturer lists, assessing market potential, meetings with foreign buyers, and preparing products for entry into international markets. The Trade Commission’s Virtual Trade Commissioner website guides you through the process of researching your target country and sector, providing business leads, reports, business culture tips, contacts, and resources.
Make Sure You Get Paid.
The most common form of payment when doing international trade is Letters of Credit (LC’s). With an LC, you minimize your risk because the banks assure that the goods are delivered before the money is exchanged. If you are looking at ways of making sure that you get paid, talk to your bank about LC’s.
Get Good Shippers.
Because transportation is such a big component of international trade, you need to be able to rely on your shippers so that you can meet the demands of your clients to get your product to them when they need it.