Improvements in communications and technology have made exporting a reality for many companies, both large and small. Today, exporting is not just for large companies or multinational corporations. Exporting can be profitable but it takes time, money and commitment to succeed. Making the export decision requires careful assessment of the advantages and disadvantages of expanding into new markets. This assessment is designed to identify successful export characteristics and help you determine if exporting is right for your company.

Are your products competitive?

Are your company's products internationally competitive?

Having a product that is unique or has a specific niche is one of the best reasons to consider exporting. Advanced and high tech products are often unique but require stronger sales and support efforts. Quality is a strong requirement of any product worthy of export. Quality, uniqueness, and good marketing can help overcome price differentials.

Unsolicited sales can build up to a point where a company becomes an exporter with minimum cost and effort.

Has your company received inquiries from foreign countries?

Selling outside the U.S., even if the sale was the result of an unsolicited inquiry, provides you with the momentum to enter international markets. Most companies find that the differences between export and domestic sales operations are not that great.

Does your company sales have a positive growth rate over the past three years?

Growth and industry reputation are both incentives to expand your current business activity and can help motivate your export efforts. A desire for stability indicates a willingness to make long-term commitments, an important ingredient for export success.

Do you have an export marketing plan?

Does exporting fit into your company's overall marketing objectives?

A return from exporting can take time since an exporting marketing plan is designed to run from three to five years. Once you have determined that there is potential for your products or services in markets outside the U.S., it's vital to make a commitment. With 96% of the world's customers living outside the U.S., success is rarely a matter of not having a market. An examination of those companies that have succeeded in establishing themselves abroad will usually show that they took the time to find their markets and persevered until it paid off.

Will your company develop an international marketing plan with defined goals and objectives?

Organization is as important as patience in exporting. There are several differences between doing business in the U.S. and exporting. Each of these differences increases the need for an organized approach. Market research, documentation, terms of payment, transportation, marketing agreements and tax treatment are only a few of the areas in which exporting differs from domestic sales.

The Tennessee Small Business Development Center can assist in the creation of an international marketing plan.

Will your company budget at least $5,000 for initial export development? This budget should include items such as international travel, market research, and business training.

Successful international business is about building relationships. Travel and training can aid in creating a successful relationship. These should be viewed as essential business expenses.

Has your company conducted market research using secondary sources of information?

Unlike domestic sales where market information can be obtained from direct contact with clients or via your sales force, international market research relies heavily upon the use of secondary research. Whether it's at your local library or through material from the Department of Commerce office, you will have to spend time researching your potential markets before you set targets and draft a plan. This can be the single most difficult part of starting an export program. Companies that are not comfortable using this type of market data will have to make adjustments.

The Small Business Development Center, Department of Commerce and the Tennessee Export Office can help you identify sources of secondary research.

Can you serve foreign customers?

Will your company ensure that export sales orders will be processed with the same expediency of domestic sales orders?

Timeliness carries just as much importance in international markets as it does domestically. Delays in processing orders can damage a reputation and close a market.

Will your company give its foreign representatives and customers the same attention and level of service given to domestic representatives and customers?

Unless you choose to export with the aid of an Export Trading Company or some other type of export assistance, you will most likely need a foreign representative. If you have serious problems working with this type of agreement, you will be limiting your overseas prospects.

Will your company appoint someone internally to develop export sales? (Ideally, this person would be familiar with the language, and practices of your target markets.)

One of the most important steps in initiating an export marketing program is designating a person who will be responsible for coordinating and developing the plan. The early organization of information will make exporting much easier and decrease the likelihood of initial confusion.

Does your company have sufficient production capacity that can be committed to the export market over the long-term?

An increase in sales from exporting can mean greater utilization of your production capacity. This will reduce your average unit costs and will lead to greater profitability, and will result in your products becoming more competitive in the domestic market. Also, selling in more than one market diversifies your risk and may enable you to extend production of a product even after sales in the U.S. have decreased.

Is your company willing to modify product packaging and ingredients to meet foreign import regulations, food safety standards, and cultural preferences?

While flexibility may be one of the requirements of exporting, it's also one of its benefits. To succeed, it's vital that your product fit the market. While this may require physical modifications it also means being flexible on pricing, terms of sale, marketing support or some other aspect of the sale.

Does your company have a staff who can handle export documentation?

Training in documentation is essential as mistakes can stop an order and be costly. The Tennessee Small Business Development Center, Tennessee Export Office and the Department of Commerce can provide direction in export documentation.

Can you afford to export?

Is your company well established in the domestic market and financially stable?

If your business is going well, you will be in a good position to pursue international sales without the pressure of immediate results. This is not the case if you look to exporting to balance a slowdown in the U.S. market. If your domestic business is growing, you will want to examine those opportunities before you export. If your business has been volatile, exporting can help even out dramatic swings.

Will management accept a payback of three years or more on exporting?

Increasing sales is the ultimate goal of all exporters, but to start exporting for that reason may place too much pressure for quick results.

Will your company's management set yearly export sales goals with long-term objectives of making export sales a substantial percentage of total corporate sales?

Exporting should be viewed as a new activity. This does not mean it should be isolated from the rest of your business, but the differences should be approached accordingly.

Is your company aware of how currency exchange rate fluctuations can affect company sales and profits?

Several of the best reasons to initiate an export program are to take advantage of different seasons, spread out production schedules, reduce fixed costs, maintain an even flow of production materials, or take the pressure off peak periods of demand. Business cycles effect every market, but there is often a lag between when they touch different countries. International marketing allows you to concentrate your efforts where the business is growing. Also, if your product is sensitive to seasonal business fluctuations, you can follow your peak seasons as they shift around the world.

Does your company have the financial resources to actively support the promotion of your products in the targeted markets over the long-term?

Doing business outside the U.S. opens your eyes to new horizons. You can learn about different methods and develop new ways to exploit your strengths. Also, as the world's markets continue to overlap, you will be preparing your company for future growth. Financial support is important to the long-term success for a market. Name recognition, reputation and other marketing aspects can take longer to build in foreign markets.

The test required you to look at factors that are key to succeeding in international business. There are other resources that can assist you in developing an export plan, identifying opportunities, allocating resources, pricing and marketing strategies and other areas of international business. Please review the list of trade assistance organizations and the brief description in the section that immediately follows.

Special recognition and appreciation goes to the Tennessee Export Office, the U.S. Department of Commerce and the Tennessee Small Business Development Center for their contributions.

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