EXPORT MONTANA
OFFICE OF TRADE & INTERNATIONAL RELATIONS
IS YOUR COMPANY EXPORT READY?
For some Montana companies, selling products or services in the export market may be a natural next step in growing their business. But it isn’t for everyone in every situation; at least not without preparation. The Export Readiness Quiz below can help you decide if you are ready to take the leap. And if you need assistance, we’re ready to help.
EXPORT READINESS QUIZ
Ask yourself the following questions to help determine if the export market is right for you.
1. Does your company have a product or service that has been successfully sold in the domestic market (in the U.S.A.)?
YES: A product or service’s success in the domestic market is a good indicator of its potential success in markets abroad. However, since selling domestically and internationally are entirely different ventures, you will need to do some research about the basics of exporting to help determine what to expect when selling internationally.
NO: If your product or service is untried in the domestic marketplace, you could benefit from concentrating on domestic sales first. In the meantime, do some research on the basics of exporting to learn what to expect when your product or service is ready to export.
Alternately, many companies make a business of taking other companies’ products into the export marketplace. These export management companies, trading companies, and brokerage firms benefit by representing products or services that have done well in the domestic market.
2. Does your company have or is your company preparing an international marketing plan with defined goals and strategies?
YES: A marketing plan allows your company to find and focus on the best export opportunities. Formulating an export strategy based on good information and proper assessment of markets increase the chances that the best and most profitable options will be chosen, that resources will be used effectively, and that efforts will consequently be carried through to success.
NO: Many companies begin export activities haphazardly, without carefully screening markets or options for market entry. While these companies may or may not have a measure of success, they may overlook better (more profitable) export opportunities. If early export efforts are unsuccessful because of poor planning, your company may be misled into abandoning exporting altogether. Formulating an export strategy based on good information and proper assessment increases the chances that the best options will be chosen, that resources will be used effectively, and that efforts will consequently be carried through to success.
3. Does your company have sufficient production capacity that can be committed to the export market?
YES: It’s important that your company can meet the demand that it is creating. You may need more space and equipment in order to manufacture for the specific countries you are selling to (who have their own product standards and regulations). Expanding into the international marketplace will result in a higher number of units to manufacture and you do not want this increase in production to affect quality of output.
NO: Refer to the Yes answer (above) and also consider expanding your capacity or finding alternate means to meet the demand before beginning export.
4. Does your company have the financial resources to actively support the marketing of your products in the targeted overseas markets?
YES OR NO: Market development requires funds. This is a big hurdle for many companies, as it involves activities such as international travel, trade show participation, market research, and international business training. However, there are many government programs to help finance selling overseas. The Export-Import Bank, Small Business Administration, and Department of Agriculture all have programs that provide financial assistance to U.S. exporters.
5. Is your company's management committed to developing export markets and willing and able to dedicate staff, time and resources to the process?
YES: Management commitment is the number one determining factor for export success. Developing an export market takes time and effort.
NO: Refer to the Yes answer (above) and also consider that if your company does not have the time and resources to commit to developing an export market, you might want to consider using the services of an export management trading company.
6. Is your company committed to providing the same level of service given to your domestic customers?
YES OR NO: This is a commitment that you must make before beginning to sell overseas. A successful exporter treats his or her foreign business with the same commitment and service as the domestic business. Establish policies to deal with international inquiries, building relationships with overseas customers, and options for service delivery.
7. Does your company have adequate knowledge in modifying product packaging and ingredients to meet foreign import regulations and cultural preferences?
YES OR NO: Selecting and preparing your product for export requires not only product knowledge but also knowledge of the unique characteristics of each market being targeted. Market research conducted and contacts with foreign representatives should give your company an idea of what products can be sold and where. However, before the sale can occur, your company may need to modify a particular product to satisfy buyer tastes or needs in foreign markets, or legal requirements for the marketplace.
8. Does your company have adequate knowledge in shipping its product overseas, such as identifying and selecting international freight forwarders and freight costing?
YES OR NO: When shipping a product overseas, you must be aware of packing, labeling, documentation and insurance requirements. An international freight forwarder can help. These agents are familiar with the import rules and regulations of foreign countries, the export regulations of the U.S. government, the methods of shipping, and the documents related to foreign trade. Freight forwarders
assist exporters in preparing price quotations by advising on freight costs, port charges, consular fees, costs of special documentation, insurance costs and their handling fees. For more information on freight forwarders, visit the National Customs Brokers and Freight Forwarders Association of America at http://ncbfaa.org/.
9. Does your company have adequate knowledge of export payment mechanisms, such as developing and negotiating letters of credit?
YES OR NO: Experienced exporters have extensive knowledge of export payment mechanisms and extend credit cautiously. They evaluate new customers with care and continuously monitor older accounts. Do your research on ways to receive payments, selecting a method of payment, and currency issues and payment problems. It is always advisable to check a buyer's credit. A U.S. Commercial Service International Company Profile (ICP) provides useful information for credit checks. An ICP contains financial information on a foreign company and a discussion regarding its size, capitalization, and years in business.
