A Lack of Planning and Experience Can Doom Your Export Business

A young entrepreneur invented a new type of a lap counter, used for counting laps in swimming pools. He possessed obvious inventive and technical skills, and his unbridled enthusiasm more than compensated for his lack of marketing skills.

Promotion and launch of the product included displaying it at a trade show in Atlanta. An unexpected visitor appeared at his booth.

The German visitor, immediately awed with the lap counter asked, “Are you ready to do business internationally?” Not wanting to lose a potential sale, he emphatically responded, “Sure!” The German expressed an interest in distributing the lap counters in Germany and solicited price quotes.

Upon his return to the office, our young friend frantically called for help. After relating his experience in Atlanta to me, he admitted, “I have no experience in selling to Germany. I don't know how to price and ship the product. I certainly don’t want the German distributor to know about my ignorance, but I want to consummate the sale.”

Download the free white paper—
Develop Your Export Strategy:
5 Things Every Exporter Should Know.

We spent several hours discussing the risks from a financial perspective and pricing with several different Incoterms options. For governmental assistance, I referred him to the local office of the U.S. Department of Commerce and to a competent freight forwarder who educated him about the logistics of international shipping.

While I observed his entry into international business with interest, including his several trips to Germany, ultimately our friend’s lack of capital and credit resulted in the downfall of his venture, and he closed his doors.

Successful international companies develop a tactical global strategy before entering a new market. First, they successfully expand domestically. A successful business history in the United States, the best place to build a successful business, will prepare a company for a global market. If not successful at home, how can a company be successful in a market with different laws, business norms, languages, culture, currencies, etc.?

Smart companies strategize well in advance. They devote financial resources to the expansion and have a firm commitment from top management that permeates through the entire organization. Great product ideas, backed with a strategy of how to obtain and use resources, will result in a long and profitable venture.

Companies needing help can find it. The United States federal government hosts useful websites such as export.gov and the U.S. Export Assistance Centers (USEAC). There are helpful state and local government resources as well. (Make sure you read the article, Export Assistance: State, Federal and International Resources.)

Many banks, freight forwarders, and colleges eagerly offer assistance. World Trade Centers, or similar nearby organizations, offer classes and workshops that cover many topics relative to international trade. Visit the International Chamber of Commerce website for a list of practical books. You'll find a variety of import-export seminars and webinars at private companies like International Business Training.

In short, anyone looking for help doesn’t need to look far.