Are you ready? To be successful, you need to make informed decisions and a commitment in terms of time, staff and funds. But it's within your reach.
The numbers add up
First, ask yourself, is your product something that foreign consumers or manufacturers might need or desire? If your answer is yes, you should consider the value of exporting.
Are you worried that your company isn't big enough to export? Think again. Size isn't an issue.
Companies looking to increase profits through exporting have at least two options - hold the price of your goods constant in foreign dollars and get more back in U.S. dollars than you would have previously, or keep your price consistent in U.S. dollars and make more in volume. That means that if your product costs $1 in euros, it now takes more dollars to equal a euro. If you hold your price the same in dollars, the lower cost in euros might convince foreign customers to buy more.
Are you ready?
When evaluating the export potential of your business, start with these basic questions.
* Has your product been successfully marketed in the United States? If so, there's a good chance that it will be successful in similar markets abroad.
* Have sales declined locally due to increased competition or the introduction of a more technologically advanced model? Other countries may not need state-of-the-art technology and may welcome another supplier.
* Is your product unique? Does it have important features that are difficult to duplicate abroad?
If your product successfully measures up to these general standards, the next step is to assess your company's commitment to developing a proactive, long-term export business. According to the Pennsylvania Economic Planning and Development Council, additional self-assessment questions include:
* Does exporting fit into your overall marketing and sales objectives?
* Can you give foreign customers the same attention and service you give to U.S. customers?
* Are you willing to modify product packaging and ingredients to meet foreign regulations and cultural preferences?
* Are you aware of the constant change in foreign exchange rates that can impact sales and profits?
Formulating an export strategy based on solid information and proper assessment will help bring success.
Local resources and expert advice
Perceived barriers to exporting, such as foreign languages, foreign currencies and other issues, can be better navigated with input from resources in your own business community, including small business development centers and regional planning and development commissions.
Select financial organizations also can help. From setting up letters of credit and hedging foreign exchange risk to securing financing for your buyer and establishing local banking services, banks work with companies and sponsor trade workshops to spur growth beyond the U.S. borders.
Don't let the "E" word dissuade you. Exporting can be quite profitable, especially in this time of a weaker dollar. With improvements in communications and technology, exporting is a real option for many companies. How about yours?
Ben Willingham is senior vice president and sales manager for corporate banking in Ohio at PNC Bank, National Association, member of The PNC Financial Services Group Inc. PNC Bank is a 2004 Presidential "E" Award winner honored by the U.S. Department of Commerce for export services. Reach Willingham at (513) 651-7558.
This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.