Four steps SMEs should take to prepare for exporting

Expanding abroad is an ideal way for SMEs to increase profitability and diversify their market base, providing businesses with greater product demand and enhanced growth opportunities.

With free trade agreements already in effect with key markets and a significant agreement between Australia and the European Union currently being negotiated, businesses can access new markets in a more streamlined and cost-effective manner.

Before beginning the export process, there are four key steps SMEs should take:

Market analysis

Understanding if a market supports your commercial objectives is essential. Before beginning to find a foreign partner or distributor, SMEs need to understand sector-specific growth opportunities, notable trends such as consumer spending habits as well as short and long-term market risks. Based on these insights businesses can make strategic decisions about which market best suits their business goals.

Competitor research

New markets provide new sets of competitors. Competitor research allows SMEs to compare their own product to successful and unsuccessful examples, ascertain if there is a gap in the market that could be met by their product or service and assess price ranges. Importantly, evaluating competitors also indicates if there is an aspect of the SME’s product that needs to be revisited before export.  

Regulatory mapping

It is important that SMEs identify the laws,

regulations and requirements of specific markets. For example, it is likely that an investment will need to be made to ensure a product’s packaging meets certain conditions such as organic certifications, perishable goods labelling, product warning statements and waste legislation. SMEs will save both time and money by identifying these obligations early on in the export process.

Brand and marketing overview

Selling abroad is not the same as selling within the Australian market. If searching for a distribution partner an SME will need to prove that their product is commercially viable. Therefore, as a minimum, businesses need to have a website and social media presence tailored for individual markets in order to communicate that their product has a demand. Without a comprehensive digital presence and strong brand identity, finding a partner is challenging.

Exporting is a logical step for SMEs looking to increase long-term profitability. However, it’s important to consider that expanding abroad requires a significant investment in terms of financial resources, time and commitment. Preparation is key, and having a comprehensive understanding of the chosen market – opportunities, risks, competitors, regulatory standards, trends – is fundamental.   

Taylee Lewis, Head of Australia & Asia-Pacific Division, ClassNet

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