How to Develop an Export Strategy

Exporting offers the prospect of new markets, more sales, better profits and a greater spread of customers. Without a clear strategy, however, none of these benefits are likely to be realised. International trade is often more risky and costly than doing business at home.

The first step is to find out whether your products have any international potential and to assess the strength of your competitors. Next, you will have to select the most promising markets, then decide who to work with and how to market yourself. Do not expect instant results.

Assess your position

• Be clear about your reasons for exporting.
• Ask yourself how ready you are as an organisation to start exporting.
• Identify the particular risks you need to address.
• Decide how aggressively you want to pursue opportunities.

Draw up an action plan

• Decide where you should focus your efforts.
• Establish your objectives and budgets. Spell out what you are hoping to achieve in terms of sales, turnover and profitability.
• Plan how you will manage your exports.
• Consider getting help.

Research potential markets

• Find out what you can about export markets from home. Check international trade statistics online or in your local library to work out where demand is strongest for your products.
• Explore foreign markets in person. Attend a trade fair to meet potential competitors, suppliers and customers.

Check the legal and tax position

•  Find out about the key legal issues in your potential export market.
  
• Your product will need to comply with local regulations: For example, safety standards and labelling requirements.
• Intellectual property becomes more complicated when you start selling overseas.
• Prepare a comprehensive sales contract. Be clear in the sales contract about where your responsibilities end and the buyer's start.
• Use internationally agreed Incoterms to avoid any confusion about who is delivering the goods, arranging freight insurance, and paying for transport.
• Make sure you understand the tax rules. Exports are usually zero-rated for VAT, with payment in the country of destination. You need to keep proof that your goods have left Greece.

Reach the market

• Be prepared to modify your product and your marketing to take account of local rules and cultural preferences. Check your market proposition. Overseas customers might think about your product in ways that you do not expect.
• Think about how best to reach your target audience. You might find that your product is sold in different ways and through different channels.
• Consider any changes that you need to make to your branding and labelling. For example, you may have to rename your product.
• Select a channel for selling into the market. You may be able to sell directly: for example, via your website, using direct mail or at trade shows.
• Be clear about how you will deliver your goods. Your choice of whether to use sea, road, rail or air as your mode of transport depends on your type of goods and how quickly they have to be delivered.
• Aim to offer a service that equals or surpasses local expectations. Reply promptly to any enquiries and sign any letters personally.

Finance

• Guard yourself against non-payment. Decide how much credit you are prepared to extend yourself or take out insurance.
• Always ask whether a prospective customer is a properly formed company and can pay its bills.
• Be clear about how you are going to chase up payment. Ask your bank about invoice discounting to protect your cashflow.
• Have a back-up plan for re-selling your goods if the customer refuses to accept them.
• Negotiate a method of payment to reflect the risks that you are running. Advance payment is safest. You are paid before the goods are shipped.
• Take care about how funds are transferred. Cheques can bounce and are slow to clear. Banker's drafts and international money orders are safer, but they are more expensive and can still be lost in transit.
• Before dispatching any goods, think about insuring yourself against the three most common export risks. Credit insurance offers protection against non-payment.
• If you are being paid in local currency, guard against any fluctuations in foreign exchange rates by setting up a forward contract with your bank.
• Take out cargo insurance to cover any damage or loss to goods in transit.