Export trading can be a profitable way of expanding your business, spreading risk and reducing your dependence on the domestic market. Free trade agreements, globalization, and the ease of communication made possible via the internet, are continually drawing world markets closer together.
There are many benefits to exporting including:
- Economies of scale – the more you produce the lower the production cost per unit.
- Product life extension – products that are in decline here may be new entrants or just moving into the growth stage overseas.
- Seasonal factors – our summer is someone’s else’s winter, exporting allows you to sell your seasonal products year round.
- Improved performance.
- New opportunities for growth.
- Use of excess capacity.
There has never been a better time for Ethiopian companies to enter the export market. Making your exporting efforts successful, however, requires a long-term commitment, as well as the ability and willingness to understand and follow business disciplines and professional advice.
First Steps to Exporting
There are many steps to creating a business culture and infrastructure that is conducive to exporting. In addition to market research and financing there are legal issues, insurance and logistics specific to exporting overseas.
TAP-Ethiopia invites all interested business leaders, government officials, associations, institutions, corporations, and individuals interested in starting export trading but are trying to decide whether or not exporting is the best course of action for their particular company, or are looking to further enhance their already existing export activities to go through our comprehensive and regularly updated archive of Resources.
If you have decided that exporting is the way forward for your business the next step is to develop an export plan. Not only will an export plan force you to organize your thoughts, it is also often necessary to secure funding.
A SWOT analysis is the place to begin. A critical assessment of the strengths, weaknesses, opportunities and threats facing your business in export markets will allow you to assess the viability of your export ambitions and identify potential problems before they arise.
Next, select a market. Market research will help you identify potential opportunities, market size, trends, potential barriers to entry and other information that will help you build your export plan. In addition to picking a country, you also need to identify your target market within that country. It is important to be as specific as possible in order to identify the best method of distribution, sales and marketing.
Distribution channels, partners and routes to market is the next area to tackle. You need to decide the best way to get your products or services to the new market as well as develop a strategy for sales.
Now comes the marketing budget. You need to be realistic in listing the expenses you are likely to incur. Ensure that every possible expense is on the budget including commissioned market research, overseas travel, trade events, marketing collateral, translation services and product customization.
If you need help in creating an export plan, browse through TAP-Ethiopia’s Business Directory and find Consultancy companies based in Ethiopia specializing in providing such services.
Ethiopian export performance has been steadily increasing over the past few years, and the numbers are expected to keep increasing throughout the foreseeable future. To encourage export trading the Government of Ethiopia has ramped up its support by attracting Foreign Direct Investment as well as encouraging Ethiopian and the Ethiopian Diaspora Community to participate in export-oriented manufacturing business activities.
It is also expected that the future may also hold tremendous opportunities for Small and medium sized business offering niche products to grow in to star performers in export trading. TAP-Ethiopia encourages all businesses in Ethiopia to take consider exporting and offers its services. Isn’t it time you tried it?