Exporting - A How-To-Guide For SMEs

Some basics

First up:

• Think smaller when starting out.
  
  
• Start earlier rather than later.
  
  
• Closer is generally cheaper.
  
  
• Local links can pay off big time.

Most common mistakes businesses make

These include:

• Failure to obtain advice.
  
  
• Inability to balance domestic and export markets.
  
  
• Assumption that all markets are the same.
  
  
• Lack of follow-up service/support.
  
  
• Lack of commitment from top management.

Still interested? Your responses to the following questions should help you make a decision.

Is your product exportable?

Consider carefully why you think your product or service can be successfully exported.

• What makes it different?
  
  
• What makes it competitive?
  
  
• What needs or functions does it serve?

Is your company capable of exporting?

• Do you have the production capacity to meet the demand from new markets and sustain an offshore trade program?
  
  
• Can you expand this capacity quickly if and when you need to? Delivering on time is critical. If you lose a customer because you can't fill an order on time you may very well have lost them permanently.
  
  
• What are the nuts and bolts of export administration?

Is this the right time to export?

• Do you have total commitment from the boardroom to the shop floor?
  
  
• Do you have the right personnel to be able to service export markets? The international marketplace is highly competitive so good customer service is critical. You must be able to service a customer's needs quickly and efficiently.

Can you afford to have staff, or yourself, out of your office for an extended period of time?

• You and/or your staff may need to travel overseas. Face-to-face meetings are often necessary not only in establishing business but also in maintaining relationships.

Does your company have sound marketing knowledge to be able to develop a product overseas?

• Have you considered that your marketing plan may need to be altered to take into account the different overseas cultures and customs?
  
  
• Do you or your staff have a reasonable command of the language required? (Don't assume English works everywhere.)

Which market should you focus on and do you have a market entry strategy?

• Have you considered that it may be more cost effective to expand locally first? The majority of successful exporters have already developed their market in Australia before going offshore.

Important considerations

1. Developing export markets can be costly in time, money and resources. Think about how long it took you to break into the local market and then multiply this several times over.
   
   
2. Initially research, research, research! Any move into offshore markets must initially involve a thorough analysis of the chosen offshore market, incorporating the size, distribution capabilities and competition for your particular goods or services within an overseas market.
   
   
3. Have a unique selling proposition. Don't ever consider exporting products that are produced successfully in every country, no matter how solid your domestic sales are.
   
   
4. Don't try and go it alone. The Federal Government's Austrade, ABL's International Trade & Business Solutions as well as your local State or Territory Department of State and Regional Development are dedicated to assisting Australian business sell offshore successfully.
   
   
5. Design a model of who you would like as your business partner and representative within your selected overseas market. Seek help, advice and contacts through the relevant agencies.
   
   
6. Begin in only one market. If you are a SME investigate what are termed "beginners markets" which include New Zealand, Singapore and the Pacific Islands. These countries are English speaking, have very similar legal and financial structures, share similar time zones and are relatively small markets, with populations under four million.

Available help

Organisations such as ABL and Austrade provide comprehensive advice, information and programs for first time Australian exporters. Further industry and sector specific help is also available but any first time exporter should take full advantage of the New Exporter Development Program as well as the Export Market Development Grant (EMDG).

Austrade and TradeStart

Austrade and TradeStart offer a package of free services designed to assist small and medium-sized Australian companies develop their business overseas and make their first export sale.

Their packages have been designed to give Australian business the best possible start to exporting via a range of free services incorporating:

• advice and information on export development.
  
  
• coaching.
  
  
• review of export capability and evaluation of export readiness identification of suitable target markets.
  
  
• guidance with international marketing strategies and business plans.

Once a market has been selected services include:

• briefings on local practice and business culture.
  
  
• appointments with appropriate business contacts.
  
  
• help with participation at international exhibitions and trade fairs.
  
  
• assistance on the ground in foreign markets.

Export Marketing Development Grant (EMDG)

The EMDG is provided by the Federal Government to assist small to medium businesses with their export marketing and promotional costs. Up to $150.4 million is provided annually and it has been estimated that an additional $12 in exports is generated for every grant dollar.

To be eligible a company must have maximum income for the grant year of not more than $30 million and also pass a low level grants entry test which determines a company's exporting readiness.

The EMDG is a retrospective reimbursement program which refunds a company up to 50 per cent of their export marketing and promotional costs, over $15,000. A company is eligible for up to seven grants, which do not have to be consecutive and this flexibility takes into account fluctuating conditions, like the recent SARS outbreak in South East Asia.

As more grants are paid the reimbursement percentage falls, but by the time a company is applying for its second last or last grant they should be exporting very successfully.

Marketing and promotional costs, over the first $15,000, which can be claimed via the EMDG include:

• overseas representative and marketing consultant expenses.
  
  
• marketing visit costs (airfares and an overseas visit daily allowance).
  
  
• production of printed and online promotional material.
  
  
• communication costs as well as bringing overseas buyers and clients to Australia.

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