In addition to bringing in hard currency to Lebanese companies struggling with the financial crisis, exports can significantly contribute to increasing sales volume and reducing costs. Regardless of their size, all companies have the potential to become exporters. However, certain prerequisites must be met for a company to be labeled export-ready.
To begin the journey towards exporting, a company must first conduct a thorough introspection of its structure, product-readiness, and production capacity. This introspection should be followed by an in-depth analysis of the destination country or countries, considering legal requirements, market characteristics, and distribution channels. By following a comprehensive ten-step manual, numerous companies have successfully transformed into first-class exporters:
1- Branding: Establishing a strong digital presence is crucial when introducing your company to potential customers. Enhancing your website with visual cues such as a beautiful logo, label, success stories, and testimonials from satisfied customers can go a long way in promoting your company and products. Depending on your target markets, considering website translation may be necessary.
2- Trading name: It is important to check if trademarks and copyrights apply in the target market. Additionally, ensure that your brand name or logos do not have any negative cultural connotations in the specific market.
3- Understand the export business: Gain a basic understanding of export logistics and dynamics through various webinars and educational resources. Familiarize yourself with distribution strategies such as physical presence, online e-commerce, local distributors, or partnerships. Learn different strategies to approach international markets and how to review and negotiate agreements with potential partners.
4- Evaluate your product’s readiness: Each country has its own requirements regarding shelf-life, approved additives, health or nutrition claims, and storage conditions. Adhering to certain quality or food safety standards may be necessary, either by law or in practice. Anticipating and addressing these constraints in terms of product packaging, formulation, and production processes is essential.
5- Know thyself: Gain a clear understanding of your company’s strengths, capacity, and weaknesses to effectively target potential customers. Measure your production capacity and investigate the ability to expand both in terms of human resources and material resources to meet growing demand. Address any previous non-conformity incidents and recalls promptly, as international recalls can be time-consuming and expensive.
6- Select a target market: If resources are limited, it is advisable to “start near and small” by selecting countries that are geographically close and share the same language or benefit from international trade agreements such as GAFTA. Conduct thorough desk research on the economic and political stability of potential new markets, their consumption preferences, and import statistics. Utilize country risk classifications and ratings provided by organizations like the Organization for Economic Cooperation and Development and Export Development Canada (EDC).
7- Conduct due diligence: Take the time to thoroughly investigate potential distributors or clients, including their company structure and portfolio. Ideally, they should sell complementary products rather than identical ones. Analyze their financial health and check for any debarred or sanctioned companies. Most countries have records of debarred or sanctioned companies for instance, check the OECD web page on Bribery and export credits. Establish a strong relationship with selected partners by frequent communication and helping them understand your products and unique selling proposition. Additionally, analyze competitor products and define a route-to-market strategy.
8- Maintain updated legal information: Legal requirements in countries and for distributors constantly change. Stay updated on required certifications, vertical and horizontal regulations, local and regional requirements, third-party inspections, and specific laboratory testing requirements. Maintaining up-to-date legal information is essential to prevent potential mishaps. Seek assistance from consultants to stay informed about evolving regulations. Political or phytosanitary concerns in export markets can hinder or halt access for extended periods. Since 2015, Australia lost access of its summer fruits to Vietnam due to concerns related to summer flies. On the other hand, it took eight years for China to obtain market access for its white pears to Australia in the 1990s.
9- Get connected: Develop a network of potential partners to facilitate your export endeavors. Participate in trade fairs or virtual exhibitions specific to your target markets. Platforms like Stamegna and BizVibe can help connect FMCG importers and exporters or buyers and sellers in various sectors. Utilize professional networking platforms like LinkedIn or rely on your consultants to provide relevant links.
10- Mitigate risks: Proper preventive measures can help reduce risks associated with exports. Obtain suitable insurance where applicable, identify the appropriate incoterms, provide written quotations, and obtain documented approvals. Clearly define product specifications and expected shipment dates to prevent conflicts in the future. To mitigate risks related to bad debts or payment delays, consider requesting irrevocable letters of credit or payments in advance.
Seek assistance: Recognize that the export business takes time and setbacks are inevitable. Do not give up at the first challenge. Experts are available to help you become export-ready and improve the quality, shelf-life, and overall appeal of your products in export markets. Contact Q Pulse Consulting to enhance your potential for success in the export market, boost your sales, and navigate the challenges of the financial crisis more effectively.