Writing an Export Business Plan
A Guide During the Life of Your Export Business
“The plan is useless. But planning is essential.” Former President Dwight Eisenhower said that. Planning is a process, setting concrete milestones and tracking progress, with frequent review and revisions. But you can’t do planning without starting with a plan.
—Tim Berry, founder, Bplans.com
Congratulations! You have determined you are export ready. You have what it takes to export and have decided on the type of export you wish to launch: a product, a service, or both. Now it’s time to map out what you intend to accomplish during the life of your export business. It’s time to think about your export prosperity in a new and dynamic way. This starts with the global mindset we covered earlier and moves to crafting what’s ahead for your business on the international front. The process, which many dread because it requires a deep dive into strategic thinking, becomes an operational plan for controlling the export business and serves as a guide for growth and export success. The export business plan will become a part of your overall business plan—you’ll see how and why later on.
Note The Internet plays a huge part in the exporting world, and that is reflected in this book. There are a lot of online tools and resources referenced throughout the book, so it will be handy to have a computer or tablet nearby.
Purpose of an Export Business Plan
There are four main purposes for the export business plan that you will write. The first is that it will serve as a guide during the initial stages of your export growth. The second is that it will give you a chance to describe your product or service offering, detail a realistic sales-and-marketing strategy (e.g., how you will reach your customers), provide a range of viable return-on-investment figures, and explain what variables will affect those numbers positively or negatively. The third purpose is that if you plan to seek out loans, whether export related or not, a business plan that includes an international expansion component is required by potential partners, lenders, and investors in order to understand your business strategy. And last, if you are looking for direction, creating a great export business plan will get you there quicker.
Putting a plan in place doesn’t mean you look at it once and file it in a cabinet. It’s a powerful, living document reflecting your ideas, team, and efforts. It’s meant to be edited, referred to, and shared constantly throughout the growth of the business. A plan can be as simple as ideas jotted down on the back of a napkin or as thorough as a twenty-five-page report. Whether short or long, the plan should focus on what is important to you, what energizes and motivates you, and what gives you a sense of purpose and meaning—doing something bigger and beyond yourself. Start with the basics:
Then ask yourself whether the two answers you came up with are in alignment. For example, my answers might be:
OK, you get it. I’m out of alignment on my vision for what I love to do versus what I intend to do to make that vision a reality. Let’s try again:
There you have it! My passion for something I love to do is in line with what I plan to do for a business—the ideal scenario for starting a business. That means my love of the product will sustain me during the sharp turns and bumps on the road to achieving exporting success. Experiment until you find your passion. Sometimes it can take several attempts before you realize what turns you on—whether it’s selling pizzas, hammers, or making money!
Being purposeful is not something that just happens. You must be proactive and intentional. Did I personally start my business with an export business plan? Yes, for myself and the benefit of my team. Did we follow it? Not exactly. Our primary focus was to secure an initial overseas customer who would translate into an export sale and then push the transaction through to make a profit. We then reviewed the plan to see how we fared relative to what we were trying to accomplish, and we compared results to the realities of the market. We then decided to forge ahead on similar type deals in other countries.
In getting a business or an initiative like an export transaction off the ground, customers matter the most, but you need to go further. A great plan outlines and supports the assumptions you have going into the business and serves as a guide for where you’re headed.
Pitfalls of Not Having an Export Business Plan
Not interested in developing a plan? That’s an option and it is your choice. You must be short on time and eager to get to market. Bypassing strategic thinking for short-term gain can be risky (think along the lines of driving a car to a new, distant destination without a map or GPS). Yet it can be tempting because it is a quick way to test whether a product or service will sell in the export marketplace.
In my experience working with hundreds of start-ups and business owners, those who fail to develop a plan make several mistakes along the way. Here are some of the common pitfalls. Believe me, these aren’t all of them.
These so-called export sins are just the tip of the iceberg on what can potentially go wrong if you don’t plan accordingly. If you are still dead set on moving ahead without a plan, do so at your own risk. I urge you, however, to at some point consider formalizing a plan so that you can fully capitalize on your idea and leverage it for luring potential partners, lenders, and investors.
Pointers for Developing an Export Business Plan
You should always measure your plan’s progress against the market reality, which can be highly unpredictable. You can’t go wrong with that approach. For example, you might sell designer diapers via your e-commerce site, emphasizing distribution to English-speaking countries such as Australia and New Zealand, only to find out quickly that the bulk of your inquiries are in French, the native language of the majority of your prospective customers.
Whatever plan you select, have backup Plans B, C, and D in place. For example, let’s say you select Ireland to export catfish to and find out two months later that the Irish don’t like catfish. Plan B might be to sell your catfish to another market, say the United Kingdom, or to sell another fish that the Irish like. Be smart and apply the global mindset we talked about in Chapter 1, which is to stay flexible and adaptable. Just because you revert to Plan B or C doesn’t mean you failed and that exporting won’t work. Rather, it means the market reality is such that your original plan won’t work and thank goodness you were smart enough to develop contingency plans.
Last, free trade agreements improve foreign market access for exporters, promote economic growth, and create jobs. Study active FTAs in advance of selecting an export market and preparing your export business plan to see how they will benefit your organization. Factor that information into your decision-making process accordingly. For example, NAFTA is the FTA among Canada, the United States, and Mexico serving to remove most barriers to trade and investment in that region.
UNDERSTAND MARKET CONDITIONS
Once you have a good idea of what you want to export and where, you can fill out your picture of market conditions by answering questions like these (this is a list I put together for a client):
Use your own business sense and add to the list. Once you actually start research (refer to Chapter 4), more questions will arise. This is all part of the process of turning your vague ambitions into a concrete export business plan based on market realities, so the smarter your questions and more upfront your answers, the better your chances of success.
Three Types of Export Business Plans
Now you’re ready to get organized and create your own plan. To keep the process manageable, let’s look at three different types of sample template plans, each with distinct advantages for business people with different needs. Pick the one that works best for you, keeping in mind that you can shorten the analysis while keeping the major components of the plan intact.
The Back-of-the-Napkin Export Business Plan
The back-of-the-napkin export business plan is for folks who are big on ideas and pressed for time and want to get to market fast. While it’s typically short and sweet, it serves a better purpose than having no export business plan at all. A back-of-the-napkin export business plan can be as simple as explaining what the business does, what you want to do next export-wise, and how you are going to get there (who is going to be on board). It might look like this:
Add a Web site link to show what the business does and provide an executive summary that includes the founder’s bio and the key team members, and you’re done.
The Traditional Export Business Plan
It’s important to have a business plan, but you don’t have to reinvent the wheel to create one. One place to visit and bookmark online is the Small Business Administration’s “Export Business Planner” (http://www.sba.gov/exportbusinessplanner). It is a free, customizable tool for small-business owners who are exploring exporting. When you are using the planner, you can refer to Getting Started: Creating an Export Business Plan. It outlines the following (in Chapter 124, we guide you on market research so don’t overly challenge yourself if you can’t answer all the questions at the initial planning stage):
In summary, the most difficult aspect in developing an export business plan is determining the demand for a product or service offering in a foreign country. It’s one thing to know a product can be sold in a market—after all, that’s why you selected a particular market—but it is a totally different ballgame when it comes to forecasting how much you can sell and over what time frame. Assume that the demand for a product develops in direct proportion to the economic development in each country. This might be a useful way to think about it, especially when data might be unknown.
WHERE DO YOU WANT TO GO?
Keep your analysis of markets that you want to pursue to one page and break it into four manageable parts (use a, b, c, and d below). The purpose of this exercise is to establish a broad scope for your research-market analysis but not so broad that you overwhelm yourself. Try to begin with the end in mind: where do you want to go and how will you know that you have arrived?
The Laurel Export Business Plan
The following plan—I’ll call it the Laurel export business plan (LEBP)—has worked well for many of my clients. You can focus on each section heading and then build out accordingly based on the questions I pose and comments I make. What many clients experience as they develop an export plan is the eureka moment: “I can do this!” The trick is to craft a plan that suits you and can absorb economic shifts and shocks along the way yet still allow for you to achieve successful results. And it can’t hurt for you to use both the traditional business export and Laurel export plans to develop yours.
Tip It is important to identify where the cash will come from to support your export operation. Conduct a complete audit of your cash situation so you are not surprised later on to learn you need more money than anticipated to reach a new overseas market. Face weak links and potential problems before you are knee deep in a fantastic opportunity.
Caution Are you crystal clear on who your customers are and why they use your product or service? If not, go back and do a major rethink!
Tip Utilizing market and customer intelligence determines a company’s ability to perceive and adapt to changes in the global marketplace. The more homework you do, the better the chance you have to achieve desired results.
Tip Have your export dream team (EDT) review your plan so that they can seek external sources of advice, test it, and hold you accountable and responsible for implementing it.
As your export business grows, you will become more aware of external factors that influence your business plan, which will allow you to develop ways to manage and adapt to them. These external factors might include: import regulations, exchange rates, availability of finance, new or unexpected competition, and disruptive technology and logistics, to name just a few. As mentioned earlier, anticipating change and adapting to it requires strategic leadership as well as Backup Plans B, C, and D.
Summary: Leaving You with Fun and Export Adventure on Your Mind
You should express and experience the passion you have for exporting in the crafting of your export business plan. If that enthusiasm is not there, reconsider what you are attempting to do. It might not be the right time. Individuals e-mail me on a weekly basis saying, “Here’s what I want to do in the export market . . . .” Then they ask me: “Will it work?” My response: “I don’t know. It depends on you.” (Reread Chapter 1!) This brings us back to the goal of this chapter: creating an export business plan that meets your needs and serves the life of your business.
Now that you know what is involved, craft your own export business plan and use it as a tool for building your export business—and don’t forget to maximize profits! Look at it regularly, revise it when necessary, and pay attention to the reality of the market. It will sharpen what you are doing, why you are doing it, and help you define and achieve professional and personal goals.
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