When starting any type of a new business, the creation of a good solid business plan will be essential. But this is especially the case when going the route of an import export business. Any endeavour must start out with a strong foundation – and the same holds true for a company. It requires a plan so that the business owner, as well as those around the business, will know which direction to go in order for the company to achieve its goals.
Starting your own business is not an easy task – and although there is a great deal of information available to you on the subject of business planning, at times it can almost seem overwhelming. Therefore, it’s important to pare down the market, the demographic area, and the type of company that you intend to start prior to moving forward. Once you have done so, moving through your business plan will be much easier.
The starting of an import export business in particular does not require that you have a great deal of experience in this specific field. However, it is necessary that you are well organized, and that you also have a good head for detail – even the details that you may feel are minute.
Also, if you have the ability to sell and you are diplomatic, this will tend to serve you well if you are starting an import export company. This is because a great deal of your success will depend upon “matching up” those who have products to sell with those who need and want them. Doing so with the right people and products can be extremely lucrative for you.
What Type of Import Export Business To Start
In essence, an import export business can be considered a “match maker” that connects a distributor in one market with manufacturers in another. For instance, a product manufacturer in one area may be seeking a foreign distributor for its items. Your job would then be to find these companies, establish a good business relationship with them, and then to make a solid connection between them. For doing so, you can then charge a fee for your services.
Typically, those who are in the import export business can charge somewhere between 10 to 15% over the product cost for a commission. Therefore, if you are working with products in the $1 million to $2 million range, consider the amount of your profit!
The good news is that there are literally thousands upon thousands of companies in the world that are seeking these types of relationships – so your opportunities are virtually unlimited. However, prior to going out and selling your services, it will be necessary to first create a business plan.
In this plan, you should establish who your ideal target market will be. Doing so will help you to narrow down the ideal customer that you will serve. This can make your selling efforts much more focused and in turn, more likely to be successful, as you can highlight to your clients the value that you offer.
Prior to writing your business plan, though, you will first need to determine the actual type of import export business that you will be starting, as there several different types of players in the industry. These include the following:
- Import / Export Merchants– Import / export merchants work as a type of “free agent” in that these businesses have no particular client base, and for the
most part they do not specialize in any one particular industry or product line. Rather, they will typically purchase products directly from either a foreign or a domestic product manufacturer and then pack, ship, and resell the products on their own. This means that in this type of import export procedure, while the merchant takes on all of the risk, they also are able to reap all of the profits. This type of import export structure, then, can be highly lucrative. It can also, however, be quite risky as well.
- Export Trading Company (ETC)– If working as an export trading company, or an ETC, the company will seek out what foreign buyers want to purchase and then find domestic product sources that are willing to export. There are times when an export trading company may actually take title to the products and then there are other times when they will work more on a commissioned sales basis. Depending on the situation, it may require various paperwork and export documentation. If you decide to go the route of being an ETC, you can opt to work on various deals, depending on which way will be more profitable to you.
- Export Management Company(EMC) – An export management company, or EMC, will handle all of the export operations for a domestic firm that wishes to offer and sell its products overseas, but yet does not want to involve itself in the actual procedures of doing so. In this case, the EMC will take the responsibility of hiring the product distributors, marketing the product, packaging the product, shipping the items, and even arranging the financing if needed. In some cases, the Export Management Company may even take title to the products – which in turn, would make it become its own distributor of sorts. In most instances, export management companies will specialize in a particular product area or in a certain demographic market.
Ensuring the Creation of a Proper Business Plan
Once you have decided upon the type of import export business that you will start, you can then begin to put the pieces into place for your business plan. It is important here that you choose the right plan for your particular type of venture.
When creating your plan, it helps to have several export import business plan examples to look over. This way, you can model your plan after a successful import export business plan example that best fits your particular business model.
When reviewing the import export sample business plans, be sure to follow closely to the template and not leave out any of the important information. This is especially important if you will require financing. This is because banks and lenders will want to review all of the details pertaining to your company’s projected income and expenses, as well as the data on how you anticipate growing the business in the future.
Where to Locate Import Export Business Plan Models
If you want to get started right away and you are seeking an import export business plan template, there are several good sources where these can be found. First, you can typically locate hard copies at a local office supply store. In addition, there are also many online sources that will offer you an import export business plan sample free for downloading. That way, you will have the template readily available on your computer for use at any time.
Many of the import export business plan samples that are available can provide you with specifics on various products, too. For instance, you may be able to find readily available plan templates for furniture importers, food imports, and fitness equipment importers, just to name a few. By locating sample plans with the product or products that you plan to work with, you will be able to create your business plan much more quickly than having to start from scratch.
Key Components of the Business Plan
There are several key components to the business plan that you will need to ensure are completed. These include the following:
- Executive Summary – If you will use your business plan to raise funds from banks and / or investors, then it should include an executive summary at the beginning. This portion of the business plan should contain the strongest selling points about the company.
- Company Description – The company description should also be near the beginning of the business plan. Here you should include details such as where your main office is located, where your operations are performed, and where your company’s other representatives and / or affiliates are located. This section of the plan will also outline how the company operates and what special skills the company offers that can help your clients sell to international markets. In this section, you should really highlight how your company adds value to its clients and what sets your firm apart from its other competitors. For example, if you have employees who are experts in certain areas, it is in this section of the business plan where that particular information should ideally be placed.
- Marketing – In the marketing section of the business plan, you should show how your company can help clients to make international product sales. Because you will likely be prospecting for clients in foreign markets, you should ideally present in this section of the business plan how your company already has a presence either in or near their markets. If applicable, you could also provide examples of successful transactions in such markets that you have already conducted.
- Financial – In the financial section of your business plan, you should highlight the relationships that your company has with international banks that are active in trade finance. If your company and / or members of your team have worked with such banks on the issue and confirmation of commercial letters of credit, then that will definitely be considered a strength for your business. In this section, you can also highlight how your company is skilled in the area of international trade finance.
- Team – In this section, introduce and provide information about all of your company’s team members. Potential clients are interested in knowing whom they may be working with. Therefore, provide information on the experience and the ability of your team members – especially as it relates to the various aspects of exporting and international trade finance. Also included should be each person’s bio, inclusive of his or her education and employment background. You may also wish to include information on your overseas representatives, and also highlight these individuals’ connections to business sectors that import and export from various countries.
Taking the Next Step
Starting an import export business can be a lucrative endeavour. While it will take some time and effort on the front end to get up and running, the payoff can certainly be substantial for those who do the proper amount of research, networking, and hard work.
All of this begins, however, with a good solid plan. This plan must outline both short- and long-term business goals, as well as define in detail exactly how the company plans to attain its achievements. Your business plan is ultimately your roadmap to success, without which any business – large or small – will surely struggle.