News From Terre Haute, Indiana

Business

January 25, 2014

BUSINESS CENTS: Plan, plan, plan before exporting goods

TERRE HAUTE — Business and history run in cycles. As history has dictated there was a time in the United States in which our country was the leading exporter of goods. However, many economic challenges have emerged, and our culture has been through some changes. We are now importing more than exporting and relying heavily on other countries to fill our demands.

As a small business owner, you may have considered exporting your goods, but maybe you’re unsure of where to begin. One of the first things you should do is determine whether your business is ready to export.

n A business plan doesn’t stop when you open your doors. Any time you strongly consider adding a new product line, service category or importing/ exporting, you should be considering the feasibility and impact on your current business situation.

Trust me, I very much understand that developing a 45-page business plan is not the ideal way to spend a Saturday evening. But doing your due diligence is worth the investment of your time to determine if you are exporting to the right country, if there is a market, how much it will cost you to enter that market, and how much it will profit you.

n Border crossing isn’t cheap. As you prepare to cross from the border of the United States into another country, how much will it cost you? International trade can also include freight costs, customs brokerage fees, exporting insurance, agent’s fees and more. There could potentially be indirect costs as well, such as translations of labels. See step one: plan, plan, plan.

n The government is there for you. The Department of Foreign Affairs and International Trade has at least 150 trade commissioners posted in foreign cities to promote the export of goods. They can assist with directories, manufacturer lists, assessing market potential, meeting with foreign buyers — the list goes on and on. In addition, they can help you with local cultural aspects, cultural traditions and beliefs that may also impact your product and doing business in that country.

n Money, money, money. Making sure you get paid is critical. The most common form of payment when doing international trade is what is known as a Letter of Credit (LCs). With this document you can minimize your risk because banks assure that the goods are delivered before money is exchanged.

n Get excellent shippers. Because transportation is always a concern abroad — and a huge component of international trade — make sure you have reputable and reliable shippers. Good shippers help you meet the demands and expectations of your customers.

Once you have considered these five points, have conducted research and have developed a written plan, you are one step closer to conducting international trade and growing your company.

Heather (Penney) Strohm is the regional director for Indiana State University’s Indiana Small Business Development Center

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