Small and Medium Enterprises while planning a foray into International Business, find the entire process of learning about the markets, the legalities and many other aspects of Intl. business taxing difficult. The IndiaMART Knowledge Services team has received the feedback from many emerging enterprises to help them understand the activities.
For some the basic question is: Why should I export?
One of the basic most answer to this question always is that the foreign markets are more profitable to do business with, where your business can make more margins on the total earnings. Also the emerging markets across the globe which are near to Indian shores are far more receptive to to business from India. There have been examples set by large companies like Bharti in the acquisition of Zain Telecom. There are many smaller examples already in line.
The market dynamics are changing: product life cycle is getting shorter, go to market plans are changing, customer is becoming more active and informed. With the changing scenario, small companies do need to scale up globally to remain competitive.
Exporting is not really a survival option, but a the part of business scaling up globally. Hence the decision making on exports must involve the strategic teams of the enterprise who are responsible for spearheading the business scaling up.
What are the Benefits of Exporting?
For some the basic question is: Why should I export?
One of the basic most answer to this question always is that the foreign markets are more profitable to do business with, where your business can make more margins on the total earnings. Also the emerging markets across the globe which are near to Indian shores are far more receptive to to business from India. There have been examples set by large companies like Bharti in the acquisition of Zain Telecom. There are many smaller examples already in line.
The market dynamics are changing: product life cycle is getting shorter, go to market plans are changing, customer is becoming more active and informed. With the changing scenario, small companies do need to scale up globally to remain competitive.
Exporting is not really a survival option, but a the part of business scaling up globally. Hence the decision making on exports must involve the strategic teams of the enterprise who are responsible for spearheading the business scaling up.
Source: http://unitedstatesexporter.com/common/imagelib/index.htm/707_420_280_crop_b2feb.jpg
What are the Benefits of Exporting?
- Decreased vulnerability to losing clients and economic fluctuations in the domestic market
- Increased sales
- Increased focus on innovation and expansion; with the opportunities provided by the Intl. markets new product/ service categories can be evolved
- Increased expertise and experience; starting from your global business development team to the real people on the ground (product/ services) team, each one learns the nuances of going global
Laws and Regulatory Framework
In many emerging markets the laws and regulatory frameworks are less taxing as compared to those in the domestic markets. Also, since the emerging global markets are opening up to widen their presence, they have relaxed laws and business regulatory framework.
Word of Caution
Exports obviously will not be desirable always for all products and services. There has to be a strong feasibility study done before deciding upon entering the export markets. Exporting has its own set of constraints which must be taken into account:
- Increased operational and administrative load on your existing business : your business must be prepared for the same
- Requirement for raising finance: your current business may have to raise up loans/ debt/ funding to fuel its expansion plans globally
- Requirement to train people: if your business is of a nature that you can serve the global customer sitting here in India, good, if you have to make exist a local team, you will have to recruit and train a team there, while setting the vision for the Intl. team
- Change in branding: your branding might have to be changed in the Intl. shores, people there might see and value your brand very differently as compared to what your brand is valued at in the domestic markets
- Sales: you might have to deploy a local sales team in the global regions which has more in-depth know-how of the markets and can effectively help you kick-start business
What about having a business partner there?
Yes, you can always operate legally by having a business partner in Intl. shores but with the caution that you must be well aware of the laws, as business might be conducted very differently there and as one of the most obvious reasons, you will have to have a lot of faith and trust in your business partner.
Everything must be done as per Intl. laws. and as a strong word of caution, you must ensure all paper-work is correct and in line.
Exports are critical for business scaling up but you have to ensure everything is in line. IndiaMART Knowledge Services team will be happy to extend help and help you grow! Drop in a comment to this post and share your experiences of going Intl.
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