As your company grows, you may one day find yourself receiving an order from a customer in another country – whether that’s from just across the border in Mexico, or across the ocean in Japan.
This will probably spark a series of questions: Is my company ready to export? How much will it cost? What are the regulations around shipping my product globally? Is exporting even worth it?
Exporting can be tremendously beneficial. It diversifies your customer base and exposes your goods and services to new markets, which may derive more value from your product than here in the U.S. Exporters also tend to be stronger and more resilient companies back home.
And while exporting comes with its own set of challenges and complexities, programs like World Trade Center San Diego’s MetroConnect are here to help small and medium-sized businesses access funding and resources to begin selling overseas. ➝ Apply to MetroConnect by December 17.
Is your company ready to export? Here are three factors to consider:
1. Do I have the financial resources to break into a new market?
Breaking into a new market isn’t cheap. In the same way introducing your product or service to a domestic market requires thoughtful strategy and investment, expanding internationally means you need to invest in promoting your product, through the right channels and utilizing the right tools.
But unlike domestic channels, you may need to make additional modifications for your product or service to get approval – whether via translation, new market research, or regulatory costs. There will also be additional costs with getting your products to customers that are geographically farther away, as well as tariffs and non-tariff barriers to consider.
Finally, the global marketplace is highly competitive – and competing by offering the lowest price is often not possible for San Diego-based companies. Instead, a deep understanding of your value proposition and a readiness to devote the necessary resources to amplifying your message in the right places can set you up for success.
Bottom line: If you’re ready to devote financial resources toward international expansion, your company may want to explore an export strategy.
2. Do I have people on my team who can devote the time, effort, and expertise exporting requires?
Developing the right relationships with suppliers, distributors, customers, and investors in each market takes time and consistency. This, as well as familiarizing yourself with the unique cultural preferences and market dynamics of the country or region you’re trying to break into, will require time, staffing resources, and often international travel.
Hiring people with the right technical knowledge of your industry segment in your target market or having the bandwidth to dedicate your team’s existing expertise will often be critical to your success. But if your team is already taxed to its limit, you are unable to hire for your team’s unmet expertise needs, or you plan to treat exporting as a side project, you may find sustained volume and exporting success hard to come by.
Bottom line: If you can devote staff time, resources, and expertise toward expansion, you may be ready to export.
3. Has my company had domestic success?
In most cases, the U.S. market will be your first consideration for expansion. You’ll know the language and culture, skip the trade barriers, take advantage of well-established institutions, and generally face less financial and political risk. As a U.S. company, too, you’re probably more familiar with your industry’s specific ecosystem.
So take advantage of the domestic market first, if possible. Domestic success can be a method to estimate your international potential…and whether you should be expanding internationally to begin with. And swimming in the domestic market will help you fully understand what truly differentiates your product or service, with no currency or other major financial risk.
But if you’ve enjoyed domestic success or a specific international market can help take your business to the next level, expanding your customer base overseas can give you a competitive edge in some key ways:
- You’ll leverage economies of scale, where more order flow can lower your production cost
- You’ll diversify your revenue streams. COVID-19 taught us that different markets can be impacted by significant global shocks in different ways, at different times.
- You can learn from international competitors and partners, and apply these new tactics internationally and here at home.
- You’ll have the chance to fight back against global competitors in their home market, rather than here in yours.
Bottom line: If your company has enjoyed domestic success and you want to take your business to the next level, you’re ready to export.
Keep in mind:
While this list is certainly not exhaustive, it’ll help you ask the right questions when exploring whether your company is ready to get out there and meet the other 95% of this planet’s consumers.
And remember: Success doesn’t happen overnight. While you may receive sizable, one-off international orders through online channels or following a trade show, generating sustained demand from a new market will generally require you to be intentional about your strategy and devote adequate resources to your export strategy.
Ready to export? Apply now to join our next MetroConnect cohort.
Is your small and medium-sized company ready to export and grow internationally, but needs the funding, guidance, and support to expand?
Not ready yet? ➝ Stay connected with WTCSD opportunities via email.
You might also like:
- WTC San Diego’s Global Brief: October 2021
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- Take your business global with MetroConnect VI