Motives for Internationalisation | Why Start Exporting?

Since the beginning of this millennium we have witnessed an enormous digital transformation in the world. The way we communicate, interact, travel, work, study, entertain; all the conventional means are either replaced by or stayed as alternatives to digital substitutes. You can prefer an ebook to a hardcover, a media streaming platform to a dvd, or you can order your headphones online instead of heading to a shop.

All these examples show that you’re a neighbour of anybody in any country, which also means you can be an employee of an employer from thousands of kilometers away or vice versa. In such a globalized world, as a company owner, everyone is your potential customer and everywhere is your potential market. What’s more, thanks to the digital revolution, even the smallest companies can export their products easily.

Why should you start exporting?

While exporting and importing has become so easy, it’s inevitable for a business to go global. It’s not only because exporting is easy, but also necessary. 

As countries have become more integrated with each other, the companies of all sizes have discovered their potential; made research, connected online, travelled and started businesses with different cultures.

On the other hand, non-exporting companies have seen import products competing with the local ones as well as their competitors’ international activities and development; therefore, they have been pushed to engage in competition. This is of course not the only reason for exporting; in addition to feeling that you are forced to it, there are also good reasons to start exporting.

Motives to Start Exporting

Spread risks

Exporting is especially a must for businesses that are not from developed countries. In such countries there is always a risk of things going bad. It could be an economic or political situation that harms the company. There could be a coup or devaluation in the country; the government could be at odds with other countries and it ends up with negative effects on the consumers’ purchasing power which eventually decreases your sales.

To prevent yourself from such consequences, you’ll need to spread risks by exporting your goods or services to foreign markets and boost your bottom line with foreign currency income.

Seeking new markets

Your home market may not bring you enough revenue anymore due to fierce competition increasing day by day or there may not be enough customers for your products. That makes you seek new markets to retain your business; therefore, you’ll not rely on a single market but a variety of foreign markets.

Smoothing seasonal product use

If your product or service is not demanded all year round, you naturally end up having slowdowns for a specific period of time. To be able to sell your goods during the entire year, you can define your target markets accordingly and keep going without a break.

Broaden your customer base

As a result of managing seasonal slowdowns by entering new markets, you have henceforth more customers to work with. You can now be less worried about sales decline as you’ll not be affected with a possible slowdown in the home market as much as before.

Increase your profits

Easy math… The more you sell, the more profit you make. What’s more, you make more money out of exports than domestic sales.

Trade agreements

Thanks to free trade agreements (FTAs), contracting party countries reduce or dismantle tariff barriers which make those markets the same as the domestic market in terms of competition. Rather than struggling in just one market, all you need to do is get out of the lake and dive into the sea: promote your business and get into competition.

Easy access to worldwide markets

As I mentioned at the beginning, reaching the information and making use of it has never been so easy and free. Online directories, B2B platforms, search engines, online maps, social media platforms, states’ information source websites for exporting and many more channels are all there for you to deliver you what you need. Such a technological power takes you wherever you want. Besides internet,

  • Logistics services have developed a lot making it easy and cheap to ship your goods overseas.
  • Today SMEs are more familiar with export-import procedures and know more about doing business with different cultures. This is partly thanks to the training and incentives of governments that encourage small businesses to go global.
  • There is an abundant variety of services that facilitate foreign trade. We see quite a number of consultants, forwarders, insurance companies, customs brokers, courses, sourcing agencies around. They all help you to make your foreign trade journey pretty easy and right.

Vision

As an SME exports its products and globalises, it automatically broadens its horizon and begins to act like an international company. It begins to follow the developments in the world and pushes itself to be constantly updated, being aware of the fact that when it stays behind the competition it’s done forever. That’s why it gives great importance to R&D, branding and networking which are the main three pillars of a long-lasting company.

Support of Governments

There are a million reasons that governments encourage companies to export their goods and services, some of which are the contribution to foreign exchange reserves, employment and gross output. The incentives generally include tax exemption on profits,export subsidies, direct payments, low-cost loans.

Your business environment

As you are not an isolated company in the country, you are always in contact with your neighbour companies and others in the same chamber, association, union etc. as you. Hearing the export talks, witnessing the shipments and getting the news whet your appetite; of that I’m sure. In addition, if your website’s traffic is good, I bet that you get unsolicited orders from abroad and that you wish you were an exporter.

So, what are you waiting for to start exporting?

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