Seven strategies to help your business succeed in exporting
When entering a new financial year, it’s natural time for any business to review their business plan and consider opportunities for future growth and expansion. An important channel for growth for many small and medium businesses (SMEs) is exporting. The opportunity to showcase quality Australian products and services overseas and compete internationally can be both exciting and rewarding.
For many SMEs, establishing an export operation can be challenging and there are many factors to consider before making the plunge. We suggest the following steps for any aspiring exporter looking to grow overseas in the next 12 months.
- Develop an export strategy, and stick to it
When you start exporting, it can be easy to get side tracked by the different options that come across your path – from potential markets to buyers and partners. It’s important to consider your options carefully, but stay focused and stick closely to your export strategy.
- Think about how to position your product or service in a new market
When considering if your product or service will succeed overseas, you need to think about price points, quality and competition among other things. How much you understand the market you are entering is key to your export success.
- Build an experienced and flexible team
When you start exporting, the flow of work may vary. You need to know you have the expertise and resources to support you when you win a big export contract. Having the right team around you, with the ability to be flexible, will be critical.
- Build your network
In the export game, relationships are everything: finding and working with great local partners will set your exporting business up for success.
- Test, test, and test again
Understanding your market is essential. Too many exporters make the mistake of launching their product or service too early, without testing whether it works and how it will be received in the local market. Just because a product is successful in one market, may not guarantee it will be in another market.
- Explore your finance options
One of the most common problems for small businesses is funding growth. Once export comes into the equation, financing requirements become even more important and many businesses need support to enable them to fulfil their export and export-related contracts.
Speak to your business banker who can assess your situation and advise you on your best course of action. Your bank may be able to offer you a secured loan or commercial bill facility to help you with financing your export growth. If your bank is unable to help, there are alternative sources of export funding which may apply to your business. Efic, Australia’s export credit agency, is one option for accessing export finance.
- Learn from the experiences of your peers
One Australian manufacturer that has been through this export journey is RJE Global, a South Australian engineering, construction and project management company. RJE Global provides a full-service range of solutions for the electrical engineering and construction of projects in the energy, renewables and mining, and infrastructure sectors.
The company specialises in prefabricating electrical infrastructure, such as control rooms, switch rooms, substations, diesel generator sets, fuel polishing systems and grid connection solutions for thermal power, solar and wind projects.
As part of its work in the Asia-Pacific, RJE Global secured two export contracts that would provide significant improvements to the power facilities of Indonesia and the Federated States of Micronesia.
The business was contracted by a global energy techniques company to assist with the delivery of more than 35 GW of additional power across Indonesia by 2019 to address the significant impact of electricity shortages.
RJE Global was also successful in securing a contract that involves the installation of two 1.8MW medium speed diesel fuelled electricity generators as part of a power station upgrade in Chuuk State, Micronesia. The Chuuk electricity grid only serves around 80 per cent of the island’s population. This project would see the power supply reach up to 95 per cent of the island’s population, equating to approximately 14,000 people.
The business was contracted to design, construct and commission a diesel fuel power station, with design and fabrication taking place in Adelaide.
While the company’s bank was supportive of the two large contracts, it was unable to provide the requested financial support without Efic’s help.
Efic was able to step in and provide a A$3 million Export Working Capital Guarantee and a US$6.27 million Bonding Facility, allowing the company to meet the equipment delivery costs and supporting bonding requirements associated with the contracts.
As for RJE Global, determining if export is right for your business will require detailed research and careful consideration. Following this guide is a step in the right direction, and will help build a strong foundation for export success.