Anybody can put a product in a box, ship it across a border and hope for the best. But how can you improve your chances for a great exporting experience? In "Competitive Strategy and Performance of Exporting SMEs" (Entrepreneurship Theory and Practice, Volume 27, Issue 3), Pierre-André Julien and Charles Ramangalahy looked at 346 companies to find common factors of exporting successes.
They studied four factors-firms' exports as a percentage of overall sales, growth in export sales, international reputation, and profitability of export sales vs. domestic sales-and found that smaller firms with a well-defined export strategy are far more successful than firms that dabble in exporting. Successful strategies incorporated export information into regular business operations and emphasized developing policies, procedures and systems for regular exporting.
Having a regular operational system in place to use information is probably more important than the perceived quality of the export information resource. If you can afford the highest quality real-time export data but aren't set up to process it properly, there's probably no advantage. Having access to lower-quality information might not be all that detrimental, provided your managers have a great strategy and well-placed systems up and running.
Tracking currency trends for payables and receivables, hosting regular trade mission inquiries from and making trade mission offers to other countries, attending export-import trade shows, tracking macroeconomic trends, and inventory-matching with suppliers and buyers are some ongoing systems any small business can implement in an export strategy.
David Newton is a professor of entrepreneurial finance at Westmont College in Santa Barbara. For more journal summaries, visit www.techknowledgepoint.com.