Export Plan

The US represents only about 5% of the world population. Domestic firms are missing 95%

of  the total world market. This year US firms are facing new threat and opportunities in the export market. Wise and aggressive US firms will see many millions in new sales and profits. Other businesses will see much of its sales and profits taken away. 

This section will help you prepare to enter the export market. We will look at the ten steps that small to mid-sized company will take to improve profits through exporting. We will explain each area and give practical project form which can be filled out for your company.

Your best plan steps are to develop small, simple plan for company self analysis, industry fact gathering, goals, tests, production, marketing, finance, staffing, outsider help and general strategies. All are important, but the keys are your company's ability, plus your unique understanding of the opportunities and methods in a foreign market and use of outside experts, particularly the US Department of Commerce, which provide a world of help for exporters, free or at low cost.

1. Company self analysis plan

Since you should not consider exporting until you have at least a moderately successful domestic operation, the first question is to check the status of your business. Are you showing a profit? good trend? do you have an exportable product? Service based industries are more difficult to export. Manufactured items are easier to export. What are your strengths and weaknesses/ staff skills and time?

2. Industry export fact plan

This can be highly important. Export success or failure usually rides more on good detailed knowledge of the market than any other factor (except perhaps your outsider help plan) The market potential can be huge. There are over hundred countries to choose from, although only a few may be appropriate. You need a plan to get solid facts. You want to minimize assumptions where errors could mean disaster. The three most important items to be checked are: 1) customer identity and opinion, 2) competitor strengths and weaknesses versus yours and 3) mechanics such as distributors, personal visits, banks, money handling, regulations, tariffs, problems and extra costs and taxes and other fees.

3. Goal sheet

Export goals and objectives should be reasonable and achievable. These would be for sales, profit, distribution, level, ROI, awareness of the product, image and possibly for stock share sales by certain point in time. Goals might be revised quarterly or annually as circumstances change.

4. Export testing plan

This can be especially important in exporting, since the company is moving into uncharted and unfamiliar market and venture. Many firms that fail to do their homework lose their shirts on export deals. They underestimate the complexity. Small tests are a low price to pay to avoid this. Your export concept should be tested. Does it fit company structure, budget, prospect needs, and marketing ability? Then prospective export users should be checked to see if the sample product fits their needs or requires changes. Finally, before a major investment is made, the export market should be tested in a small area, a marketing program planned, executed, results measured, and needed changes made to be sure the program is profitable.

5. Marketing plan

A marketing plan now becomes fairly easy. The tests have helped to design the right 8P's (product, package, price, premium, promotion, personal selling, physical distribution and publicity/ advertising). The guesswork and the risk has almost been eliminated.

6. Export production plan

Your export production plan should be carefully keyed to the marketing plan, so that product type and volume is available just when needed and not much before. The plan should cover lead time for shipping and slower distribution in Europe than in US Plan units produced by date, volume, and by type of product. Also schedule various step for each type of product. Also schedule various steps for each product. Start with only one or two products; expand as market pattern indicate. Consider initial production by local sources or nearby countries, since transport is a large part of total costs on heavy items.

7. Finance plan

This should be your profit and loss forecast for several time periods. Since this shows losses and profits it is also an indication of cash flows. It shows money in and money out. When cumulative figures are added, It shows when cumulative cash flows into the venture equal cash out from the venture. At that point it becomes the breakeven, so the chart also becomes a payout plan. Clearly this is an important three-way record of profit and loss, cash flow and breakeven point for your financial forecasting, strategic planning and ongoing future control. 

8. People plan

Your export 'people plan' begins with an inventory of skills to see if you have what you need for an export program. The chances are that you do not have an export professional individual. But you may have a person who on a part time basis could learn and help with the program. You should match people to the plan outlined so far. Show who does what and when. Prepare simple job specifications and a job description with a training schedule.

A personal visit to the foreign country can be one of the more interesting and exciting parts of the program. This should be done by the president or by the key marketing person. Objectives of the visit should be to get an on-site feel, to see retail or other outlets, and most important to arrange for a distributor. Letters and phone calls should be exchanged before the visit. A good itinerary should be set up. Good distributor prospects should be selected. In most foreign countries the distributor relationship is a personal one and mutual trust between quality people is important. Exchange resumes, photo of the plant and staff, and details of the product. Allow much time for socializing. On arrival have a checklist of information to get and to give. Take the candidate to visit some accounts and note the reception. Get a local contact to check the distributor references.

9. Outside advisor help plan

These resources are essential. Few initial exporters can go it alone. There are about a dozen good sources to check. The most important by far is the US Department of Commerce. Its number one priority is to help companies export. They can provide you with three essentials:

1) Market and prospect information (where to sell)

2) Advice on simplifying your procedure (forms to fill out, tariffs, insurance, shipping, banks, how to bill and get paid, etc)

3)Additional useful contacts.

Most of this is free or at low cost. The other sources of help and advice have been listed previously.

10. Strategy by departments

General export strategy normally requires part time action from all groups. Exporting is rarely a full time activity in small or mid sized firms. Further, any export start up situation facing company is usually more delicate, more remote, more time consuming, and in need of more co-ordination than domestic programs. So you have less time available to handle a more complex project. This calls for extra care in strategic action. A schedule should be worked out, bringing all department skills together in synchronization.

Format - Export Plan Analysis

Market Research for Export

Setting Goals

Test Business Model

Export Marketing Plan

Export Production Plan

Production volume by date and product

Production steps by period and product

Export - Financial Plan

Export - Time Plan

Export - Outsider Help Plan

Departmental Strategies