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Dos and don’ts for exporters - Graham Clayton (9/02)

Many firms view export markets as an excellent opportunity to increase sales, expand markets, increase capacity utilization and extend product life.

Many firms view export markets as an excellent opportunity to increase sales, expand markets, increase capacity utilization and extend product life. These potential benefits, however, are not guaranteed and often times hinge on a firm’s approach to getting into exporting. In many respects exporting is quite different from doing business at home, and there are a whole bunch of dos and don’ts to be observed if the export novice is to be successful.

1) Do carry out an assessment of the export potential for your product.

2) Don’t assume that you can necessarily sell your product without modifying it and/ or its packaging.

3) Do conduct an assessment of your firm’s export readiness and needs, including management commitment, staffing, finances, production and shipping capacity, foreign market knowledge, etc.

4) Don’t assume that all of your export process needs have to be handled internally.

5) Do consider using the services of available trade process intermediaries, both for foreign market operations as well as for shipping logistics.

6) Don’t assume that direct exporting is your only option, when indirect exporting or a foreign location operation may be a more logical approach for getting started.

7) Do seek advice from people who are experienced and knowledgeable in getting into exporting.

8) Don’t expect the process of export market development to entail costs and timelines similar to those experienced in the home market; for direct exporting it typically costs more and takes longer.

9) Do treat foreign clients and domestic clients as having equal status and deserving of equal service and consideration.

10) Don’t expect business to be conducted and agreements to be interpreted the same way abroad as they are at home.

11) Do recognize the importance of cross-cultural differences when it comes to pursuing business opportunities abroad, and amend your approach while sticking to those business-practice principles that are important to you.

12) Don’t feel that you necessarily have to conduct business exactly the way that foreign business contacts say you should because many items are negotiable with multiple options.

13) Do seek professional advice on sales contracts, agency and distributor agreements, legal liabilities, regulatory obligations, etc. for foreign business dealings.

14) Don’t scrimp on carrying out due diligence on buyers and companies that you are considering doing business with.

15) Do take advantage of the information, advice and even training opportunities that are available through various federal and provincial government departments and agencies.

16) Don’t assume that you or your staff have to be experts in every area of export activitybefore you can get started, instead supplement your internal abilities with externally supplied know-how.

17) Do consider your options for entering foreign markets if you decide to take the direct export route for these are numerous.

18) Don’t bite off more than you can chew if you do decide on taking the direct exporting route.

19) Do consider the option of pursuing both direct and indirect exporting concurrently, as they are not incompatible

20) Don’t pursue export market development on a counter-cyclical basis if you are serious about establishing a sustained foreign market presence rather than just looking for replacement sales opportunities until the home market picks up.

21) Do your homework, gather your facts, seek knowledgeable external advice, and take a planned approach to getting into export, it will pay off down the road.

22) Don’t overextend yourself in the pursuit of foreign sales and thereby undermine your ability to service your domestic clientele.

23) Do carry out appropriate foreign price and delivered cost calculations for your export sales that enable you to get an accurate assessment of their profitability and return on investment.

24) Don’t be surprised if some foreign distributors, trading companies, etc., seem to ask for a lot of information about your company, products, market share and technology, but at the same time exercise caution about being too forthcoming especially in the area of sensitive technology or other important privileged information.

25) Do be open to new ways of doing business and new types of business opportunities, as what we have here in Canada is only a small slice of the global pie.

Written by Graham Clayton, economist/director Institute for Global Entrepreneurship and Electronic Commerce, Confederation College.