Global is the new buzz word in business. For most of us, the idea of going global seems like a lot of effort and time — both of which are in short supply. Add to it the risk of doing business with someone who speaks a different language and uses different currency, and going global doesn’t look like a very good business opportunity. But it doesn’t have to be that way.
The Metro Phoenix Export Alliance (MPEXA) was recently formed to help small businesses identify opportunities in exporting and assist them in making exporting a reality. If you have a website, you are already global. MPEXA will become a resource for small businesses, helping identify and monetize exporting opportunities. MPEXA will be educating companies that have not exported in the past to recognize the opportunities available. The SBA Export Business Planner has a list that helps assess your business’ readiness to export.
1. Determine the Benefits and Trade-Offs of International Market Expansion
Start by brainstorming a list of benefits and trade-offs for expanding your market internationally. Your list of benefits and trade-offs should be based on your current assumptions about 1) your company, 2) your company’s products, and 3) market knowledge.
2. Perform a Business/Company Analysis
You’ll need to perform an in-depth analysis of your existing business to determine the feasibility of growth.
3. Conduct an Industry Analysis
Once you have examined the status of your own company, the next area for consideration is your overall industry. How is it currently involved in the global marketplace?
4. Identify Products or Services with Export Potential
Part of the overall analysis of your current business involves identifying products and services that may have export potential. These have sold successfully domestically or maybe have had marginal success in the U.S. but have potential for high demand overseas. Many small businesses make 100 percent of their sales in foreign markets.
5. Marketability: Match Your Product/Service with a Global Trend or Need
Once you’ve identified products/services with export potential, the next step is to identify the most profitable foreign markets for those products. This means gathering foreign market research. Ask yourself:
- Which countries are best-suited for my product?
- Which foreign markets will be easiest to penetrate?
- How does the quality of my product compare with competing in-market goods?
- Is my price competitive?
- Who could my major customers be?
6. Define Which Markets to Pursue
Once your research has revealed the largest, fastest-growing and simplest markets to penetrate for your product or service, the next step is to define which markets to pursue. It’s best to test one market, and then move on to secondary markets as your expertise develops. SBA data shows that new-to-export businesses often tend to choose too many markets at first. For most small businesses, choosing one to three foreign markets initially is recommended.
Exporting doesn’t have to be daunting and unmanageable. MPEXA is a resource you can use to help create the path of least resistance for exporting and eventually greater profitability. The initiatives created by MPEXA are making exporting easier and more straightforward for companies, helping them realize our customers are no longer just in our neighborhoods.
For more information on exporting and the services MPEXA can provide, contact Dawn Nagle at 602.386.5608.
Rick Murray is chief executive officer of ASBA