There is a view that exportation is not worthwhile for a certain size of business. Many small companies shy away from trading internationally. They feel it will not benefit them. But with this take, organisations are missing out on a huge area for making profit. So what exactly is putting them off?
In the world of business today, a large percentage of exporters are small businesses. According to a paper published by gov.co.uk, in 2013, 70% of companies found that overseas business led to fresh ideas and innovation, upgrading their products and services. 85% of UKTI clients said exporting led to a level of growth not otherwise possible (source).
The size of a business does not matter when it wants to go international. In the exporting industry, the success of small businesses is dependent on three factors:
· Quality of products
· Competitive prices
· Constant availability of products
There are risks involved in exportation, just like any other area of business. But there are various benefits of exporting which small businesses can take advantage of. Today, we’re sharing six ways to grow your business through exporting.
Potential Increase Of Sales And Profit
The more successful and high quality your products, the more chance there is for an increase of sales and profit. Your business needs to convince customers how much they need or want your products. If you can do this, your sales will definitely increase. Your business then needs to supply these high quality products at a continuous pace. If you can do this, you are able to invest in more product development to meet the changing needs of customers.
Growth In The Global Market
When a business starts exporting, it becomes a part of the global market. This means that you have the chance to gain market share. Through exporting, your business will have a strong opportunity to grow its customer base. This provides more opportunity for long term growth.
Lower Cost Of Production
Targeting a wider market means there will be an increase of supplies. But this means the actual cost of production per unit should decrease.
Increase Of Knowledge
When a business decides to enter the global market,it will gain many new experiences. These can be used to improve its growth. They can vary from acquiring information on new products, new marketing ideas or new technologies. This knowledge can help businesses to make better products and sell them more efficiently.
Spreading Out Risks
By expanding a business to other countries, it means that risks are spread more evenly. Economic downfall and changes in the market affect all businesses. But a business that has a place in the global market is less likely to suffer great losses.
Lengthen The Life Of Products
A product usually has this life cycle:
Launch – growth – maturity – decline
This was explained on Start Ups Overseas (source). But a business in the exporting industry has the opportunity to extend this life cycle. A business can launch a product to export markets, while the home market is still in the maturity stage. This starts the process all over again which extends its lifespan. The finance needed to then develop the product in the home market can come from your export sales. Your product cycle then becomes self-supporting.
Top Tips:
· Always succeed in your business’s home market before branching out globally. This way, you will get the background knowledge you need to break into global markets. If your business doesn’t have a good level of success in its home markets, it will be unlikely to achieve success elsewhere. But if your business already has a high level of success, you will most likely be a popular competitor. This competitiveness will allow you to become more successful in the exporting industry.
· Follow up is important in the exporting industry. Make contacts, learn new things and understand the culture. But these aren’t important if you don’t build relationships with your customers overseas.
These points go to show how small business can grow through exporting. The benefits and possibilities are endless. They are there to take advantage of. The size of a business is not relevant. If your business has the drive and determination to succeed in the global market you are on the road to success. Combine that with high quality products and a skilled team and there is no reason why your business won’t succeed.