Building an export plan.
Exporting to grow is a giant leap into the unknown so it's important to get your business ready for the challenge ahead.
Where to start?
Here you can learn the building blocks of an export plan so you can increase your turnover, reduce your reliance on local customers, and tap into much larger markets than New Zealand.
Making the transition from strong, local trading to success in the international marketplace is easier if you have a detailed export plan. You'll need to do some comprehensive market research on your new target markets, and a strategy to get your products or services into the hands of foreign consumers.
Research potential export markets.
The first step is to look into markets that may have demand for your products or services. Ask yourself which foreign markets are selling goods that are similar to yours. Find out which countries:
- Offer fewer difficulties to get into, such as less compliance and paper work, tariffs or customs duty
- Enjoy free trade agreements with New Zealand. Here is a list of our Free Trade Agreements confirmed and under negotiation on the Ministry of Foreign Affairs website
- Have minimal cultural and language barriers. If you're new to exporting, it may be easier to target a country you're familiar with
- Present potential for growth where your business product or service has a greater chance of expanding.
Create a list of five to ten countries before reducing it to two or three markets. By launching your products or services in only a few markets, you'll stay focused. This will give you more time to learn the nature of exporting as you proceed. Most businesses choose the easiest market first and once successful, venture out to new countries.
Travel to likely foreign markets
When and where feasible, introducing yourself to potential business partners in person can be a catalyst for branching out and making new contacts.
If you don't have any contacts, where possible consider visiting trade fairs or events that potential customers might be attending. You'll be able to talk to them in their country environment.
Study your chosen markets
Delve deeper into the economies of your chosen export markets by researching the strength of each market you intend to target. Is there enough demand for your products or services?
Examine the structure of your industry to find out who you're competing against. Will you be on the same playing field, or will your goods or services be subject to tariffs or quotas? Most foreign governments have websites with useful information for people exporting to their country.
Determine the best way to sell your products or services in your chosen foreign market. The optimal sales channel could be through a catalogue or online. Join your local Chamber of Commerce, industry association or specialist group. Talk to other businesses that already export to these markets and learn from their experiences.
Enquire about any changes you may need to make to ensure your business is acceptable to foreign cultures. Join social media communities that talk about your industry or target country.
Consider several marketing strategies.
There are plenty of strategic questions you need to ask yourself to make a successful move to foreign pastures. You'll have to tailor your marketing strategy to match your sales goals.
Choose your path to market
How will you sell your products or services? Will you endeavour to sell direct to small businesses or through:
- Sales agents
- Licensing your products or services
- Online sales direct from New Zealand.
Where it is possible for you or your agent to attend them, trade exhibitions in your target markets are excellent resources for finding the people you need to help you get your services or goods out of the shipping docks and into the shops.
Foreign sales presence & currency.
Establish a foreign sales presence
Distance, language and cultural barriers are challenging for even the most experienced exporters. Think about finding an export agent in your new target market who'll search for buyers of your products or services on your behalf.
You'll want to stay in regular contact with your agent, keeping them in-the-know in case any new product developments arise.
Another option might be entering into a joint venture with a local business, giving you access to established markets you intend to target.
Play the foreign currency game
If you're buying products offshore or quoting your prices in another currency, make sure you're aware of the exchange rates. Use Westpac's currency converter1 to compare each market in New Zealand dollars.
Find out more about how you can make and receive international payments.
Work out the costs involved with getting your goods to their foreign destinations. Do you intend to fill out shipping documentation yourself or let local experts take care of it?
Expanding your business can be an energising time and it's important to prevent your business being overstretched. Large orders in new markets with expected payment terms of 90 days could send your operation into a dangerous cycle of limited cash flow.
Be sure to negotiate reasonable payment terms with third parties on the ground. Delivery dates that are attainable will help keep everything running smoothly.
Be aware of your legal responsibilities.
All goods that are exported from New Zealand for business reasons need to be cleared by customs. It's a smart move to use a customs broker who is experienced in dealing with customs and maintaining accurate information should customs request it.
The destination of your exports will also have legal obligations that need to be met. There might be labelling and packaging requirements. This is where an export agent can be helpful for managing your business in a foreign market.
Things you should know.
1 These tools are intended as a guide only and are not intended to constitute financial advice.
The material on this webpage is provided for information purposes only and is not a recommendation or opinion.
We recommend you seek independent legal, financial and/or tax advice.
Links to other sites are provided for convenience only and Westpac accepts no responsibility for the availability or content of such websites.