Getting Export Ready

Why Export?

In most countries the domestic markets offer limited opportunities, and as economic theories and market access have evolved over the years, the concept and practice of exporting has become a common strategy used to find new overseas markets and increase profitability local products.

Export is the provision of goods, services or knowledge across national and international boundaries. For export to take place there must be a demand for the product/services and an
adequate supply to fulfil that demand. For export to take place the exporter must have
a willing buyer in the international or global market place.

Exportable products include goods, services and intellectual property. A product does not need to physically leave Barbados to be considered an export, as long as it is earning foreign exchange. For example, in-bound tourism, education and intellectual property.

Exporting benefits the economy and workers. Research shows that employers who export are able to provide more jobs at better wages and even more exposure for their employees, along
with better health and safety standards and overall work conditions.

What to consider?
In getting export ready, you the entrepreneur will need to explore different options and seek
advice on how to best capitalise on your new market and your goods. Exporting takes time
and resources. Therefore it is critical that you ensure that you are ready to enter this phase of
business and that you are sure of the benefits which it will bring to your business.

There are different methods to exporting. For example, an off-shore arrangement where you
deal directly with an importer in the target market or an on-shore arrangement where you
make the deal in Barbados, with the help of an export agent or through a Barbadian branch of
a foreign company. There is also the method of a joint venture or transfer of intellectual capital
where there can be arrangements for the product to be manufactured under licence or
some other licensing arrangement, franchising arrangement or a project management
arrangement.

However, before you can do anything about becoming a successful exporter you need to ensure that you undertake rigorous and exhaustive planning to assist in your success inyour new market. You will need to choose your market wisely. Do not concentrate on numbers alone, it is better to understand how many of those numbers will become your customers. For example India has a large population, of just over 1.1 billion people, but approximately 25% of the population lives below the poverty line and its average per capital income is less than US$1000 per year. These are important considerations if you intend to enter the Indian market. Any market which you are considering exporting to should be analysed thoroughly, taking into consideration cultural, social and political as well as economic, legal and regulatory information. If you do not take time to understand the issues in these sectors, then you will not be able to navigate the problems youwill encounter in your new market.

Building strong and trust worthy relationships is vital to the success of an exporting strategy. As soon as possible, start building business relationships in your new market among business and potential customers. You should be prepared to make several trips toconduct face-to-face meetings with partners as part of this process. This is why it is extremely important to have a solid and realistic budget.

Export Planning
In considering exporting as a business strategy, you will need to develop an export plan, similar to your business plan. It will help you to identifygaps in your knowledge as well as flaws in your assumptions. Additionally it sets out your plans and ideas and makes it easy for your advisors, mentors and business associates to review.

In this document you should have the following:

• Export Readiness Analysis- an assessment of howyour business is placed to begin exporting.
• Market Research - the key characteristics of your target markets, including current and potential competitors.
• Trade Barriers Assessment-a list of issues that may impact on your export activities and plans for dealing with them.
• Pricing - your proposed pricing strategy and reasons for it.
• Terms of Trade - the basis upon which you plan to trade with your off-shore partners and how you intend to enforce these terms.
• Logistics Plan- How do you plan to make your goods available in the off-shore markets, for example, shipping, customs regulations, and the like.
• Financing- The projected costs associated with entering the offshore market and how you plan to finance them.
• Implementation Plan- a plan and time line for entering off-shore markets.

Remember that in the early days when you are seeking to build your rapport among potential partners and customers, even minor slights and misunderstanding can be catastrophic. It is very important that you make every effort to ensure a common understanding among all concerned.

So if you decide that exporting is a business opportunity you want to explore, please:

• Do some research: Places like Caribbean Export, BIDC and the Central Bank will be able to assist in this process
• Make a checklist of your strengths and weaknesses
• Ask yourself hard questions and answer them truthfully-
• Am I adaptable, well organized, committed, a fast learner and doing well in the Barbadian market?
• Develop your written and detailed export plan, which is your export bible.
• Seek advice and help.

Resources:
www.austrade.gov.au
www.fas.usda.gov/agexport
www.ontarioexports.com
www.carib-export.com