Should I grow my business through exports?

Exporting interstate or overseas is a good way to increase your customer base as well as raise sales and productivity, but it may not be for everybody. Here are some benefits and costs of exporting your goods and services.

Benefits

  • Increased sales and profits due to the diverse nature and size of foreign markets - different markets have different consumer needs and wants.
  • Balanced growth - by entering other markets you are spreading your risks out so that if one market suffers from recession or reduced demand, your whole business won't be affected.
  • Economies of scale - expanded operations generally reduce average unit costs, boosting productivity and efficiency.
  • Innovation - Different cultures and demands can force a business to think on its feet and come up with innovative ways to do things.

Costs

  • Increased pressure on resources - Having a presence in multiple states or countries can place a strain on your finances, staff and procedures.
  • Expensive - It may also be expensive and complicated to set up agreements with governments, suppliers and other organisations to export your products there.
  • Risky - There is no guarantee that, after all your efforts to enter a certain market, you will have any success in selling your products. This is why it's important to thoroughly research the market before you export.
  • Logistical difficulties - Different time zones and geographical distance may mean that you can't respond instantly to queries, complaints or crises. There is also a certain level of risk associated with transporting your goods overseas, particularly if you lack insurance.


See also:
Are you ready to export?

The benefits of exporting

Stay small or grow?

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