Basic steps in starting an export business

An export business is a business that sells products to a country other than the one where the goods are manufactured. To start an export business, you will need to decide which products you will sell, complete the requirements for establishing a business, find funding, and develop channels to sell your goods in other countries. To start a new export business someone require to go with given procedure:

1.       Planning Your Export Business

2.       Exporting Products Successfully

3.       Starting Your Business

Part1

Planning Your Export Business

1.       Gain an understanding of the export business. In order to get started in exporting, you will need a thorough understanding of the industry and how the actual exportation process works. Research the export business by visiting federal government websites like the U.S. Department of Commerce and Export America. If you already have an idea of which countries you want to export to, you can start learning by figuring out those countries' regulations, tariffs, and duties.

2.       Decide what type of export business you will open. Exporters can choose from three main types of business operation. Each one serves a slightly different type of customer and focuses on different aspects of the market. The types are:

·         An export management company (EMC)

·         An export merchant

·         Export trading companies (ETC)

3.       Figure out what you will sell. Outline the products you plan to sell including whether you will manufacture them yourself or purchase the goods wholesale. There is no set guide for determining exactly to sell, except for that you will need to beat out both other exporters of that good and domestic producers in the country you are selling to. Your product must be unique, lower-priced, or of a higher quality than competing products to do well in a foreign market.

4.       Identify your target market. First, you'll need to identify who exactly you will be selling to. Think about who would be interested in buying your product. This can be consumers, retailers, manufacturers, wholesalers, governments, or another foreign entity.

5.       Understand your target consumer. Research their needs and gauge their desire for your product. Your market should be relatively easy to identify after you decide what type of products you will sell; however, in some cases, you may need to alter your product offerings to meet their needs. This will take some trial and error, along with a bit of foreign customer interaction either online or on the ground. Try using research to get a clearer view of the following:

6.       Write a business plan. Your business plan is an overview of how your business will operate and make money. It includes descriptions of the products that will be sold, your target markets, a marketing plan, industry analysis, competitor analysis, and earnings projections. You'll also need to specify how you plan to fund your business and any partners you will be working with.

7.       Estimate your startup costs. Your need for startup costs can range from under $5,000 to well over $1 million, depending upon the type of export business, products sold, foreign market(s) sold to, and other factors. It's okay to start small in the beginning. Test the waters first with a few sales in your target country and increase your efforts if you find success. Wait and use the cash flows from your first sales to finance later sales.

Part2

Starting Your Business

1.       Register your business and apply for a business license. Contact your state government. In most states, businesses are registered and licensed through the secretary of state's office.

2.       Find funding. The Small Business Association is a good source for funding your export business. The SBA partners with banks to offer guaranteed loan programs to small businesses.

3.       Get insured. When dealing with foreign buyers, you will have a difficult time tracking down buyers who fail to pay for the goods you deliver to them. To remedy this problem, you can purchase export credit insurance, which covers any payments not made by foreign buyers. It generally covers payments not made due to business issues, like bankruptcy, or political issues, such as revolution or government seizure of property. Coverage can be purchased from many commercial insurance providers or the US Export-Import Bank (Ex-Im Bank).

4.       Rent office and storage space. Your business space needs will vary depending on the nature of your business.

Part3

Exporting Products Successfully

1.       Partner with a company or individual who can assist you with exporting your products. Making successful sales abroad will require you to make contacts there, a task which can be difficult for small business owners with no connections. That is why it's best to work with a foreign distributor or another agent or partner that already has a network in your target country. Your foreign contact can either be an agent or a partner.

a.       For example, you could work a foreign wholesaler/distributor or a retailer to get your product into their market.

2.       Take advantage of technology. When creating an overseas network, the most cost-effective strategy is to make use of the internet. First, work to create a professional-looking website. This site will have to act as the face of your business to many international clients, who will look up your website as a first step prior to doing business with you.

3.       Organize shipping. One of your major consideration when exporting goods is deciding how to get those goods to your customers. When shipping further away, however, you have two options: air or maritime shipping. Air shipping is the faster option but can be much more expensive. Maritime shipping is cheaper but much slower. Your best move is to work with an international freight forwarder to figure out which option works best for your business.

4.       Make deals with buyers. When you've located buyers, you'll want to check out their operations and creditworthiness to ensure that you will be paid for your goods. When pricing your goods for foreign customers, you'll have to decide either to price your goods in dollars or in the target country's currency.

5.       File the proper documentation. When you get started exporting your goods, you will have to deal with a large amount of government controls and paperwork. The relevant government authority should provide guidance on filling out these forms; however, your overseas partners and/or any shipping partners you have should also be able to help you out if you get confused, especially if they are very experienced in that country.

6.       Fill your first orders. When you've find an overseas buyer, it's time to pack and ship your goods. Start by creating a pro forma invoice. Make sure that payment (or a guarantee of payment like a letter of credit) arrives before shipment of goods. When it does, pack up your goods and have them shipped. Make sure to save any shipping documentation you receive. Wait for confirmation from your buyer that your goods have arrived. You've just made your first export sale! After your items ship, you will receive a bill of lading. This document guarantees that your items arrived at the destination in good shape.