New McGladrey white paper outlines steps to export success
MANUFACTURING INSIGHTS |
What value can a robust exporting program deliver to your manufacturing business? Consider the evidence: Since 2006, the McGladrey Manufacturing & Distribution Monitor surveys show that internationally active companies tend to show less revenue declines and higher margins than those focused only on domestic sales. In the fall 2011 survey, 60 percent of companies reporting increased exports also indicate they are "Thriving and Growing", which illustrates how export sales can be a key driver for growth.
Still, getting started in exporting - or growing your existing cross-border markets - can be a daunting task. That's why McGladrey recently published Success within reach: A guide to exporting. This white paper, written for business leaders in manufacturing and distribution, offers a number of key export start-up and growth tips, including:
Start with the basics. While the broad case for exporting is clear, it's wise to take a hard look at how it fits with your specific business. Many middle market companies start their export operations by following customers into international markets, a move that can help manage risk. If you determine that a broader strategy makes sense, build a business case that illustrates why your specific product is exportable, based on the demographics and competitive landscape in your selected export market.
Line up strong internal and external resources. Any successful export initiative will require CEO involvement and dedicated executive support (which may include hiring a sales or marketing leader with significant international experience). In addition, talk with key outside advisors – including accountants, law firms and banks – about the expertise they can deliver in establishing global operations.
Leverage industry and government assets. When entering unfamiliar markets, intelligence gathering and relationship building becomes particularly important. Fortunately, you probably have a number of industry association, federal or state trade agency resources close at hand. For example, the National Association of Manufacturers (NAM), the U.S. Commerce Department and FedEx have teamed up to create the New Marketer Export Initiative, a collaborative effort to help small- and medium-sized enterprises successfully navigate the intricacies of international trade.
Evaluate need for market customization. While it's important to get a good sense of how much local adaptation is required for exported products, in some cases it may be little or none. That's because increasingly sophisticated design software allows mass customization of even complex engineered-to-order products. However, in cases where international customers or markets require more extensive adaptation, it might be worth the effort. In fact, a recent Industry Week article noted that European companies with limited domestic markets have thrived in the international marketplace by improving their mass customization capabilities - while North American manufacturers were hesitant to make similar adjustments despite global growth opportunities.
Start close to home. Once you commit to an exporting program, you don't need to start with the most exotic or distant markets. Canada is nearby and, to a great degree, culturally and politically similar to the United States (although it is a mistake to think of Canada as "America Lite"). Meanwhile, Mexico is a NAFTA signatory and consistently one the United States' largest trading partners.