How to Start a Successful Export Trading Company

Getting started correctly in any business is a key to success. Starting correctly as a new export trading company in today's tough global economy is particulary challenging, for it will take your perseverance, commitment and a clear understanding of market conditions worldwide.

The starting point is "Vision". What do you want to accomplish with this business? What is your perspective of exporting your U.S. products and/or services to customers overseas? Can you visualize successfully competing within global markets IF you implement a well written, fundamentally sound and organized business plan? Can you SEE where things can WORK? VISION is a MUST.

That slightly more than one percent of U.S. companies export goods or services, and half of those export to only one country. About 85% of all exports from the U.S. are produced by approximately 250 large manufacturing companies. Consequently, that leaves the majority of manufacturers, mostly small and mid-size companies, with few foreign sales. This is not a trend that has just developed, but has been a clear opening to significant sales opportunities for U.S. companies for some time. However many have chosen to rely on good domestic sales instead of venturing into new markets overseas.

For many firms, the main barrier is fear of risk or fear of the "unknown". Many think the process is too complicated and for some companies the extra expense or cost of opening an international sales department is not feasible. A export trading company which provides marketing services, expert knowledge of foreign protocol, research analysis and up-to-date sales information can provide a U.S. company that currently doesn't export, with the tools it needs to successfully enter foreign markets they devoted little or no attention to previously.

Exporting is your best strategy for entering into international trade. As noted earlier, 85% of exports from the United States originate from just 250 large manufacturing companies. That leaves a large number of U.S. companies that should be exporting but lack the knowledge and resources to do so. Your business plan must identify those small to mid-size U.S. companies that produce quality products and then identify 5-10 foreign markets where those products are in demand with least foreign competition. Once you have completed this initial assessment of which U.S. companies hold the best promise as a client for you and once you have reached an contractual agreement with this client you are ready to proceed. As an export trading company your responsibilities will include finding, evaluating and appointing dealers, distributors, and commission representatives in foreign markets and providing promotional support such as advertising and trade show exhibitions.

Another fit into the mix would include your company taking title to products and reselling them into foreign markets utilizing your own research analysis to determine pricing, type of distribution needed and financing you will need to complete the sale...and most importantly getting paid.

A smart business plan will be your road map to success in this business. It should have few surprises and should answer many of the questions you and others will have when reviewing your business plan. If it does not, redraft and be prepared to alter when necessary. Make sure it conforms to generally accepted guidelines of form and content. Aside from introductory market considerations, a business plan typically has as many as 12-13 sections. Each section should include specific elements that will clarify your business goals.

Typical Business Plan

1. Cover

2. Title Pages

3. Statement of Purpose and Summary

4. Table of Contents

5. Market Analysis

6. Market Strategy

7. Design and Development plans

8. Operation Plan

9. Management Structure

10. Timetable and schedules

11. Identify Potential setbacks or pitfalls

12. Identify community benefits that will enhance your business...put it heavily into plan

13. Financial date...make sure its accurate, easy to read and analyze

14. Provide easy reviewable supporting documents

Since your business plan includes market research to identify U.S. companies who manufacture products with good domestic sales but little or no foreign sales, it is imperative that you answer these important questions and design a marketing plan that is specifically tailored to meet your goals:

1. What products does this company manufacture which holds the best opportunities for successful export into a specific market you have identified?

2. What are the selling features of these products that will transition easier into these markets?

3. What countries have the greatest potential for these products? You must carefully analyze these countries and not waste time, money or energy in countries that don't work for you.

Pricing/Terms

1. Carefully study and analyze the variables which will affect pricing...i.e. cost of producing goods/services, shipping cost, competitions pricing.

2. Provide alternative financing for your foreign buyers when necessary to be competitive with foreign companies.

Competitive Analysis

1. Carefully analyze your competition...can you compete on an equal basis? If the answer is NO...then you must find out why and what you must do to level the playing field to be successful.

2.Find that "niche" within that market whereby your product/service beats the competition on both pricing and quality.

Raising start-up capital for your new business in today's economic times will be a challenge, but should not be a road block to success. There is money available but you will have to be smart in where you go for funds and how you utilize them.

You must carefully assess the following:

Since the best source of financing for starting this business is YOUR OWN MONEY...make a commitment to invest in yourself... full steam ahead with the necessary funds so you wont have to borrow and pay interest or give up equity interest in your business.

USE your own funds...the best way!

USE your credit cards...NO WAY! Interest rates for credit cards are too high.

USE Finance Companies...NO WAY! IT will put you in a hole to begin with.

USE Friends and Relatives...Try to avoid this avenue...could lead to family break-up and sour relationship with friends

USE Small Business loans...If available and you qualify... YES!

Utilize all private and governmental agencies, small business assistance programs such as:

CORE, SBA, U.S. EXIM Bank, U.S. Customs Service, International Trade Administration and Export Assistance through the U.S. Department of Commerce

Attend revelant conferences, seminars and trade missions tailored to your specific industry...avoid those events that are not revelant, waste your time and resources.

NETWORK with persons, companies and agencies that work for you and your business goals.