Ok, so you decided to take your business onto export markets. Whether you already export and wish to build up a real international development strategy, or this is a brand new step for your activity, this post is for you.
You will find below an overview of the main steps to build up a good export business plan. Each step might be (or already has been) the topic of a complete post, because each step is equally important, and must be deployed into sub-steps for effective actions.
EXPORT BUSINESS PLAN – STEP 1 : THE ANALYSIS – Where are we?
This is one of my favorite actions : we just sit down and review.
At this stage, one must be as rational and factual as possible in detailing the assets of the company, but also its weaknesses (i.e. my post on Swot analysis).
This is when we understand the core strategy of the company, its purpose, why it exists. Does the company have a focus on brand (product driven) or volume (production driven)?
Why is the company looking at export markets : is it to find a growth continuity, or is it because the local market is not dynamic anymore? Is the company prepared to deal with export orders documentation?
To finish with this first step, we might take a look at the finances : how much money could the company realistically dedicate to export development fees (this is excluding all possible subventions/loans which we will study later)
EXPORT BUSINESS PLAN – STEP 2 : THE GOAL DEFINITION – Where do we want to go?
Ok, this is actually my favorite part : when we imagine the best scenario possible. Deeply (but realistically too of course), what would the company like to achieve in export markets?
Let’s dream big : if we project into the best case scenario, what type of partnerships would the company establish? On which terms? Which Incoterm seems the most appropriate? Which export markets are we targeting and why?
In this part, we visualize better the export project of the company. This gives us a firm target to hold on to.
EXPORT BUSINESS PLAN – STEP 3 : THE NETWORK ACTIVATION – Who might help us to get there?
So many companies ignore this part, which is a shame as it may be extremely useful and time-saving. Governments often have various support plans in place to boost their local companies (especially SME’s) in their international development.
Activate your network : in this part, we talk about our export project to as many people as possible :
- We talk to experts such as international sales managers who already succeeded in the targeted export market, market specialists, editors who published articles on the targeted area, etc. One must never under-estimate the kindness of people : many experts will be glad to give precious advice, and to share information to help in your project. One of my team members recently confirmed her market study results simply by joining a local social network group.
- We talk to local authorities, financial and market specialists such as COFACE or State representatives, who will direct you onto the right contacts to apply for subventions, preferred loan solutions, or contests to participate to. The above is definitely not to undervalue : not only a lot of money can be raised this way, but it also profits to the company and project’s positive reputation and credibility.
EXPORT BUSINESS PLAN – STEP 4 : THE MARKET STUDY – How is our target behaving?
This is when we collect details on the market.
- Macroeconomics : political stability, currency fluctuations, population category (young? aging?) compulsory payment terms in place (cf. Letter of Credit in some North Africa countries), Free Trade Agreements in place with other countries, main import/export categories…
- Microeconomics / market segment analysis : how is competition doing and why? What are our competitors’ differentiation? Is future competition local or imported? What are the big consumption trend? How is distribution organized?…
At this stage, it might be useful to organize a first trip to the targeted market in order to visit a local trade show, to run store-checks, etc.
This step is essential, and there is no unique market study template : a market study plan must be directly linked to the activity of the company.
EXPORT BUSINESS PLAN – STEP 5 : THE IDENTIFICATION of POTENTIAL PARTNERS – Who do we want to sell to?
Thanks from the above actions, we now have a better understanding of the market, its players, our strengths / weaknesses, how we might match an existing need, on which segment we could be successful and bring a real differentiation on the market.
Usually, most prospects are naturally identified during the market study process or through networking influences, if well conducted.
Now, we want to select the best partners possible : they are the ones who might understand and engage in the above too, the ones who might share the same business values, the ones who have access to the targeted distribution network, and who will help in having those values recognized by the consumer locally.
Like for the market study, there is no unique way to identify potential partners as it depends on the sector and activity.
EXPORT BUSINESS PLAN – STEP 6 : THE EXPORT STRATEGY ADJUSTMENT – How do we get ready for actions?
This is when we review the conclusions from every step mentioned above, and we adjust :
- the marketing strategy : how do we want to approach our targets? How do you want to communicate? Does the product/brand need adjustments to fit the market? How do we want to position our product/service…
- the financial plan : is budget in line with the initial forecasts (including potential subventions, loan solutions, etc.)? How much turnover can we budget after one year, five years? When can we expect a positive return on investment?..
EXPORT BUSINESS PLAN – STEP 7 : LET’S DO THIS – no more questions
Approach the market and the identified potential partners with confidence, strong from the lessons learnt from the above steps. If all stages were thoroughly processed, you are close to being an expert of your targeted market : you know its features, its specificities. You also perfectly know your strengths and what will make you successful in your approach. You are also aware of your weaknesses, and you are prepared to face competitors attacks.
At this stage, the approach of potential partners is happening quite naturally as you perfectly know your segment, and how to match a specific and identified need.
If no prospect accepted a meeting after direct contact attempt or through networking influences (this rarely happens if the strategy was carefully worked on), there are local market expert agencies, often linked to the Embassies, who might help in approaching prospects, such as Business France for French companies for example, who have officies in most countries.
At this stage, a trip locally is absolutely necessary in order to meet with potential partners, to introduce your company and project in more details. Exhibiting at a local trade-show might also be a good option depending on the sector of activity. In this case, it is important to set up meetings beforehand in order to optimize your presence at the fair.
Then, it is all about selecting the best partner(s), and negotiating the terms of this future partnership… Exciting times ahead!
This was a bit long, but essential to give you an insight on how I proceed to turn a development project into a solid export strategy.
If you had to remember one thing from this post : detail a solid action plan for all stages, and unfold each step with as much objectivity as possible.
By following such plan, the positive outcome is almost certain, as the strategy is defined and readjusted throughout the various steps to ensure a coherent and meaningful approach of the export market.
I hope this post will help in your export strategy construction. Please do not hesitate to contact me should you have questions, or if you would like to share comments on your export project.
Thank you and Happy Holidays to you all!