"
EXPORTING AN ALTERNATIVE FOR SMALL BUSINESS GROWTH TARGET COUNTRY: MEXICO"By: DELIA SIGUENZA-ROJAS
As the world economy becomes, interdependent, selling abroad becomes a genuine opportunity for small business owners; they are beginning to realize the significance of selling to the world market. The size of the business does not have to be an impediment for selling in the global marketplace; experience shows that small business owners who have been able to find a niche can export successfully. An entrepreneur may consider the next advantages of exporting: Opportunity of growth, Increased number of customers, increased profits, Tax advantages, Favorable publicity and recognition, Additional markets, Added product/service lines and Improved competitiveness. However, it also demands hard work, perseverance, and a commitment of resources. It requires planning, market research, attention to detail and compliance with foreign country’s' regulations. To export an entrepreneur should be able to accomplish the following tasks:
A. Indirect Exporting
The simplest way to manage the firm’s export business is to employ outside specialists. The firm may hire a trading company. In the U.S an Export Management Company (EMC) performs all the transactions relating to foreign trade for the firm. The advantage is that the firm avoids the overhead costs and administrative burden involved in managing exports affairs. The disadvantage is that the skills and know-how are accumulated outside the firm, not in it.
B. Direct Exporting
The Advantage over the indirect exporting is in the control of operations. With direct exporting, the firm is able to more directly influence the marketing effort in the foreign market. The firm also learns how to operate abroad. The firm should decide between establishing a sales subsidiary or employing independent middlemen. The later option means and agent to mange sales and administration paid through fees and commissions. There are many separate functions to be taken into account in direct exporting, the major tasks are:
|
Product Shipment |
Local Distribution |
Getting Paid |
Legal Issues |
After-sales support |
|
Transportation to the border |
Finding a distributor |
Checking creditworthiness |
Export license |
Service |
|
Clearing through customs |
Screening distributors |
Getting paid in local currency |
Hiring an agent |
Parts and supplies |
|
|
Personal visit |
Hedging against currency losses |
Transfer of tittle/ownership |
Training of locals |
|
|
Negotiating a contract |
Converting funds to home currency |
Insurance |
Creating a sales subsidiary |
Exploring New Markets: Mexico
According to the Office of International Trade, 97% of companies involved in direct merchandising exporting are small firms representing the largest pool for potential growth in export sales. When identifying foreign markets, an entrepreneur should consider Mexico as a target country; the following reasons support this advice.
Three steps are strongly recommended to be followed when selling in the Mexican market:
TOP WEBSITES RELATED TO EXPORTS AND EXPORTING TO MEXICO
http://www.ita.doc.gov/uscs/mexico/mexico.html: A service dedicated to provide quality export assistance to U.S businesses. With information regarding: commercial services, export promotion services, trade statistics, trade events and calendars, country and industry research.
http://www.uscommerce.org.mx: site that provides a wealth of Mexico-specific commercial intelligence where information about market research and contact information can be found.
http://www.sbaonline.sba.gov/expanding/export.html: a useful site that helps small business with information about counseling in international trade, training sessions, and publications, business development information, etc.
http://www.toolkit.cch.com: a terrific web site that provides a total know-how for small business, with a wide range of subjects from getting start your business, to financing, advertising, managing, etc. It also offers connections to various other relevant sites.
http://www.exportinstitute.com: This site provides a comprehensive guide to answer the most common questions, as well as export links, and consulting on line.