Impact of international trade on your business: 7 Reasons for your business to start exporting
Anyone who starts a new business nurtures the dream of making it the best in its trade. However, it is saddening to see that many businesses never grow beyond a certain point because the business owners fall prey to the “this is enough” mentality. One thing that is certain in the world of businesses is that giving up an opportunity means other businesses will rush into utilizing it to their advantage. To stay ahead of the competition, businesses must strive for more and in the modern world, reaching international markets have never been easier!
“Exporting not only helps individual companies to grow but also plays an important role in improving our trade balance.” – Crispin Simon, Acting Chief Executive, UK Trade & Investment
Let’s review the impact of taking your business international. To be more exact, why should your company start exporting to foreign markets?!
1) The Limiter on your growth is will be raised indefinitely!
When you are in a domestic market, supplying your products to the local buyers, there is always a certain limit to how much your business can grow. By exploring foreign markets, the possibilities and opportunities are endless. Even if your domestic market is saturated, foreign markets will a different story to tell and may welcome your products with open hands.
2) Reduces your dependence on just one market
This perk comes as a result of the previous point we had mentioned but makes a strong argument for itself. When you operate your business solely in a domestic market, it becomes harder to make a profit after market saturation. However, when you open up your business to international buyers, the income flow will be scattered from more than one source. So even if the domestic requirements stalls, your business can move forward with the revenue from outside sources.
3) Increases your market share
Market shares define the stability of a business. When a business starts to trade internationally, the market shares are bound to increase because of the new buyers from all around the world. With more revenue flowing in and more buyers showing interest in investing in your business, it increases the market share of the business. It will help you further improve and innovate your business to develop it.
4) Elevates the company outlook
A company what works internationally casts a positive outlook in the eyes of outside reviewers. It will greatly position your business on a higher standard when compared to your competition. This is why see major companies trying to take their business international after they have found a sustainable foothold. The prospects aren’t just investors; the list includes employees too. A company having an international footprint is much more attractive for employees and puts your company on top of their list when it comes to searching for a job.
5) Increases product lifecycle
This is a great way to keep earning revenue from tried and tested products. When your product reaches the point of obsolesce in domestic markets, that won’t necessarily be the case internationally. You can keep on exporting the same to markets that welcome those products. It will greatly help you to increase the product lifecycle even when it is not in demand domestically; you can also choose to license the technology to international companies to earn a constant stream of income.
6) Minimizing the risk of seasonality
When you are operating in a domestic market, and your portfolio of products are subjected to seasonal requirements, like umbrellas or fashion apparel, it limits your company’s progress. But the international market is different. Countries around the world experience seasons at different times of the year. So even if it’s off-season in your domestic market, there will demand the same product internationally. This is a scalable and sustainable business model.
7) Open to more ideas
When you familiarize yourself with international markets, it inspires you to come up with solutions for problems that exist in outside countries. It is a great opportunity to create new products that apply internationally or domestically or both. It will help your business to increase its product portfolio, amassing attention from investors and other prospects alike.
Getting yourself ready to take your business international
Getting your business international is a great way to scale and develop it over time. However, like every major business decision, you need to ask yourself some questions before making the plunge. There are questions that will help you know if you are ready for such a change.
1) Have you done your research?
When you decide to take your business international, it must be carried out after excessive research on foreign markets. You must identify places that will accept your product with open arms and have enough markets that can sell your products. In essence, do no pick saturated markets.
2) Have you made contact with a trusted freight operator?
It is important that you have a reliable freight operator on your side because international trade requires prompt and professional services that can facilitate the movement of goods without any hassles.
3) Can you cater to bulk orders without delay?
Exporting your products to foreign markets will not be profitable for you if you are doing it in small shipments (this is not applicable for heavy machinery or equipment). Hence, you need to send it as bulk so that you can minimize transportation and logistics cost per part. Also, your business must be capable of fulfilling customer goods requirement promptly to sustain clients.
4) Have you researched the legal side of things
A business may sometime face trade barriers against exports products to a country. This largely depends on the level of relationship between your domestic country and the prospect country. Also, there may be other legalities the may come as a boon or bane based on certain factors. Be sure to check them out after you have decided the list of prospect countries.
5) Do you have contacts in these foreign markets
Sometimes, the best way to know about a certain place is to have first-hand info from someone who lives there. Having a contact in the foreign market that you have shortlisted will help you a great deal in understanding their customers, suppliers, and economics.
It’s better to have professional aid due to the greater risks involved
Since exporting to foreign markets carries a variety of risks, choose a reliable logistics partner like Pedraza Customhouse Brokers to facilitate storage and transport. Use our class-leading services to develop your business and take it to a greater height. We would love to answer your queries on how to start exporting as a business, contact us now!