This export business plan essentially aims at preparing the business and makes it ready for entry into the international marketplace. In this process of exporting the products, certain steps must be followed in order to achieve success. The steps are in the form of a worksheet, which is divided into sections. It is only after the business plan has been complete that an in-depth analysis of your export readiness and preparedness can be finalized.
- The first step is to choose those products with the greatest potential for export. They must be doing well in the domestic market so that they can have demand in the export markets. This can be in terms of their price, market demand, or even the value they have to the customer. In this case, the products include;
- Tempered glass and double glass units.
- Glass for home appliances
- Decorative glass
The above products must have the potential to compete in the international trade market.
- Secondly, an evaluation of the products that are intended to be offered in the international market must be done. This includes an analysis of the uniqueness of the products for an overseas market, what will attract the intended buyers to purchase the products, and the number of products you intend to sell in the international market. You should also be able to give reasons for each product’s success in the international market; so that you come up with a list of the products that show export potential.
The above procedures must be done because of the important role they play in ensuring that you achieve success and that the company grows. First and foremost, the analysis shows the level of commitment to exporting. It enables you to evaluate the product’s potential for the market, it makes it easier for successful business operations management in the international market, it facilitates communication of business ideas to other business partners or can be an enhancement of a financial proposal, and finally, business plans usually lead to successful businesses.
It is important to remember that the business plan must show your ideas and efforts and not of anyone who is not involved in the business. The planning process also creates all awareness of your future business operations and what will happen. Your knowledge about the business also increases. It is therefore important to plan your business, as this will contribute enormously to marketing the particular products in the international marketplace. Since an international business can be stimulating and very profitable, proper business planning must be done.
Before a business company ventures into the international market, it must first of all be doing well in the present domestic operation. It should also invest resources of time, capital, and people in the project. It should also be familiar with other cultures and their implications for conducting international business. For instance, the UGTT should be well oriented with Arabian culture and the diversities of African culture at large.
The importance of drafting a business plan cannot be ignored. For instance, it helps in the assessment of the market situation., the business goals, and the commitment that will increase success opportunities. In general, business plans usually limit business failure because they help one make well-informed decisions.
The plan for the products mentioned above can be done once a year and revised when necessary to increase one’s international business opportunities.
While preparing the business plan, it is important to determine your business goals. This includes both your long- and short-term business goals.
- The first step in setting your goals is to determine your long-term goals and define them. This could be export sales increase or how the international trade market will help you reach your long-term goals.
- Secondly, short-term goals should be defined, which are usually achievable within the first few months. They include visiting fairs and exhibitions, direct sales, direct marketing, participating in regional fairs, and attending export seminars.
- Finally, you should ensure that you develop an action plan, which will enable you, reach the short-term goals by suing international trade successfully.
In making your industry analysis, you should:
First of all, analyze and determine the growth of your industry for the next three years. This can be achieved by talking to business partners, attending seminars and trade fairs. Do in-depth research so that you find out how well your industry is competing in the global markets. Ensure that you familiarize yourself with your industry’s future growth in the international market. Familiarize yourself with government market studies that have been conducted on your industry’s potential international markets and find the export data about your industry.
In analyzing your business, find out why it’s successful in the domestic market and its growth rate. Find out the products that have export potential and the competitive advantages of your products over international businesses. Based on this knowledge, critically analyze your success potential in the international market. Your probability of success should be rated in terms of percentage.
In marketing your product, make high-quality glass products that are distinctively unique from other products. Ensure that you deliver the goods on time. Prepare attractive and good packaging that meets international standards and competes with other companies. Offering free gifts can be a good entice to your customers. Ensure that the glass products meet the needs of the customers, who are basically fabricators, decorative material, and home appliances manufacturers. The market categories that you should target include building contractors, retailers dealing with doors, frames, glass panels, and other Aluminum fabrications, home appliances manufacturers, and private parties using glass fabrications for various purposes like Anti Bullet glass.
Be aware of the restrictions that affect the international market, like quotas, non-tariff barriers, and tariffs. The destination of your products, like transportation problems to Africa, Turkey, and other Arabian countries, should be critically looked at in terms of geography and climate changes.
- In selecting world markets, screen the individual countries by defining the political, economic, physical, and cultural environment. Settle for two countries that have the highest potential and rate them from 1-5, 5 being the best and finally settle for one country to be your market.
When assessing the market factor, the physical environment can be analyzed in terms of population growth, size, density, urban and rural distribution, climate variations, shipping distance, and natural resources. The political environment should be looked at in terms of a system of government, ideological orientation, and attitudes towards foreign business in terms of non-tariff barriers, tariffs, bilateral trade agreements, and trade restrictions. The overall level of development usually determines the economic environment. GNP currency and the industrial sector determine economic growth. The local distribution and production are determined by the availability of intermediaries, workforce, and conditions for local manufacture.
- Projected sales levels should be determined by looking at the current domestic market percentage, projected sales for the same products on the export market for the coming year, and the projected growth in the market for the next five years.
- Customers who operate within the glass industry should be identified. Companies like building contractors who purchase similar products, retailers, or distributors of glass products who are likely customers should be contacted.
- A method of exporting should be determined by deciding whether to sell directly to the customer, who represents the company, and who offers services to customers’ needs.
- After identifying the method of exporting, a distributor or agent relationship should be built by providing the required facilities and the territory to be covered by the agent or distributor.
“Terms of sale” are very fundamental in marketing strategy. These deals with the exact point where the product should be made available either at the plant or at the port of exit. The “terms of sale” also determines the pricing strategy:
- The first step in defining an international pricing strategy is coming up with a method of calculating the price for each product, factors to consider in setting prices, your discount policy, and the best terms of sales for your export product.
- Promotion strategy involves looking at advertising materials to be used, trade missions and shows to be organized and the time of year, and how often foreign travel should be organized to visit customer markets.
- Finally, the customer services to be offered should be defined in terms of what is offered, payment options, and how merchandise returned by customers is handled. Financial projections are initiated by sales forecasts. The sales forecasts should have realistic estimates since they show the expected time the sale is made. Payment terms and delivery dates usually impact actual cash flow.
- The first step is to file the units-sold line for markets 1, 2, 3 for each year.
- Next, the sales price per unit is filled for precuts sold in markets 1, 2, and 3.
- The total sales for each different market should be calculated by multiplying units sold and sale price per unit.
- Calculate the sales for all markets for each year by adding down the columns.
- The last step is to calculate the five-year total sales for each market by adding across the rows.
Sales forecasts for the first five years are shown below in dollars;
Terms of sale and pricing strategies determine the cost of goods sold internationally. With the consultation of an international freight forwarder, the costs associated with the different terms of sales can be ascertained. Cost, insurance, and freight (CIF) port destination is a term of sale which is offered by a domestic exporter. The price should therefore include the costs to move the product to the port of destination. The costs also include the labor used in the manufacture of the product and the materials used to make the products. The costs mentioned above include; ocean freight, export packing, bunker surcharge, forwarding, cargo insurance, container loading terminal charges, documentation, handling, bank collection fees, inland freight, consular legalization, and bank documentation.
Sales forecast and costs related to your terms of sale can be considered in the preparation of this worksheet.
- The first step is to fill in the units-sold lime for markets 1, 2, and 3 for each year.
- Secondly, the cost per unit for products sold in markets 1, 2, and 3 are filled in.
- Multiply units sold with cost per unit to get the cost for each of the products.
- To calculate the cost of goods sold-all products for each year- add down the columns.
- To get the five years cost of goods for each market, add across the rows.
When calculating international overhead expenses, additional costs that pertain only to international marketing efforts, excluding any domestic costs. Most of these expenses occur only as start-up expenses in the first year, and others occur yearly.
- The first step is to review expenses incurred during the international business. Unlisted expenses are listed as “other expenses.”
- Secondly, make estimates for each expense category.
- Any domestic marketing, which is not applied to international sales, should be excluded.
- Find the total for all the international overhead expenses. Expense cost.
In conclusion, the company should create customer confidence by fulfilling promises, being reliable, enhance trustworthiness and expertise and provide a high-quality standard. It should develop new ways of generating new business leads, develop new expertise fields by expanding the operation of the company to cover other retailer areas in project consulting, marketing research, and other areas. It should also provide outsourcing services in direct marketing geared towards reaching most parts of the Arab world. Finally, emphasis should also be put on online marketing channels and updating the website.
It’s also important to bear in mind that the business plan you come up with is good enough to compete well in the international market so that you set market standards for the other products from other companies. This enhances company goodwill which will make it easier for you to attain your long-term goals over the next five years because it will be much easier to attract new customers while retaining the old ones. It also means that profits will increase tremendously as a result of increased sales. Achieving success in the international market is, therefore, the ultimate goal of preparing a business plan.