TEN REASONS YOU NEED AN EXPORT PLAN
By Doris Nagel
Have you ever tried driving somewhere without a map, GPS, or address? You have a general idea of the place - you may eventually get there, but you'll probably waste a lot of time, gas, and frustration -- all avoidable, if you'd spent just a little more time getting prepared.
Now imagine trying to get there in a broken-down car with no insurance, almost on empty, and you're not even sure of your destination. That's what trying to export your products globally without an export plan is like. Your export plan is your tuned-up car, your fuel, your GPS, the address of your destination, and pre-printed, turn-by-turn driving instructions.
It's easy to waste a lot of time and resources with trial and error with global exports. In today's competitive marketplace, it's possible for many companies to achieve digit export growth and make those sales a substantial part of their sales base. But to do that, you need a very clear understanding of your goals and the resources needed. Successfully growing your export sales (like the achievement of most goals) requires (1) focus, (2) commitment, and (3) consistency.
An export plan provides a blueprint for export success. It identifies and prioritizes the top markets for your company's products, any changes needed in the product (or its packaging or labeling) for the target markets, a process for identifying and managing in-country distributors and/or agents, reasonable sales growth objectives, and a timeline and resources required to meet those objectives.
NOTE: An export plan also is generally required if your company plans to seek any sort of export financing assistance.
Creating an international business plan helps you assemble facts, identify constraints and available resources, set priorities, goals and milestones, and develop the foundational processes needed for export success. Like all business plans, it should be a living document that is changed and expanded as you learn gain experience.
Even more importantly, a well-crafted export plan identifies the company resources necessary to implement the plan. This helps ensure that the export goals can be attained without costing more than expected, establishes management support in terms of time, money, and other company resources, and creates alignment across the organization. Managing an export business requires support from a variety of functions in a company. It will be difficult to achieve your export sales goal without their commitment.
An export plan is also a powerful launching tool when contacting distributors and service providers in your target market. It highlights your company's desires, strengths, and shows that you have well-developed and reasonable goals. In short, it shows you are serious about growing your export business.
In the beginning, keep your export plan simple. As long as it is a clear and useful management tool, it will be sufficient. Over time it can be refined with market data, other research, and include additional countries. It's more important that you have a plan than to start with none. Don't let the export plan become an obstacle in getting on with the business of building your global sales.
Here are our top 10 reasons you should have an export plan if you're thinking of exporting, (or why you should develop one even if you've already started exporting without a plan):
Clarity. An export plan provides a clear, concise roadmap of the markets you're targeting, your entry strategy, the resources you need to get there, and a reasonable timeline for achieving your goals.
Market Prioritization. A good export plan helps companies choose the best countries for their products. Without a clearly-articulated plan, you may overlook better opportunities, or spend your time and resources spread among too many markets.
Efficiency & Effectiveness. Your people and money resources are limited, and you want to use them in a way that is most likely to bring you the fastest and best payback. A scatter-gun approach or approaching exports opportunistically is unlikely to provide the best payback.
Minimizes Risk. Exporting has risks -- risks of non-payment or late payment, picking the wrong markets or the wrong distributors, unsuccessful investments in distributor training, product and packaging localization, and poor sales results that may affect the whole company. Without doing the research, thought, and planning that goes into an export plan, you greatly increase these risks.
Measurement. An export plan allows you to measure your progress and successes. The plan creates a snapshot of where you've started, sets milestones as any good project management plan does, and maps out key milestones and the steps needed to achieve those.
Organizational Alignment. With a good plan, everyone in your organization, as well as your export partners - your freight forwarders, your customs brokers, your distributors or agents, and your entire organization will understand the goals and the timeframes for implementing the goals.
Control. To export effectively, a company must demonstrate solid manufacturing capability or sources, quality control, the financial ability to fill an order and reliably deliver it on time and in good condition, and solid processes for collecting receivables.
Better Partners. Just as your company is more likely to choose business partners who appear professional, organized, and focused on supporting you, the best export partners are likely to choose to work with a company that appears to have clear, well thought-out goals. A company that can present a clear, professional, and detailed business plan demonstrates that is focused on its business activities, has considered and addressed risks, and is in control of its finances, rather than just operating blindly with no real idea of its own ability to live up to its promises.
Competitive Advantage. The number of smaller companies exporting is increasing rapidly, and in fact doubling small company exports is a stated goal of the Obama Administration. Your competitors may already be exporting or planning to export. If you develop and follow a good export plan, your company is likely to be more successful than competitors who are not as strategic or focused on their export business.
Increased Likelihood of Success. This is the most important advantage of an export plan. Just as driving without a clear destination and a map decreases the chances you'll get to your destination without a lot of wasted time and effort, trying to build an export business without a plan significantly decreases your likelihood of successfully growing your global sales channels, with a minimum of resources.
So now that you have your fueled-up car, your keys, your map, and a clear destination, you and your company should be better-prepared to make the global expansion journey.
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