Why You Should Need an Export Plan

For a company, before starting export activities, it is useful to have an export plan, to:

  • Measure the success
  • Better overlook export opportunities
Export strategy, based on previously prepared information and proper assessment, increases the probability for your company to choose the best options, use resources effectively and achieve success.

As initial purpose of an export plan is to be a management tool for export activities, it should be kept simple. Over time it can be revised and refined, with additional information, important market data, planning elements, becoming more detailed and complete.

Export Plan Outline & Content

An export plan should contain the following information, which will outline and explain the main and most vital components of you export plan. As a business document, export plan should open with a title page and a table of contents.
Executive Summery

  • Mission statement
  • Why your company should export

1. Company Description

  • Background Analysis – Why your company is ready to export

1.1.History

  • In this section, outline your company’s major developments, any experience exporting and explain your firm’s corporate legal structure, any subsidiaries, affiliates, joint ventures, strategic alliances.

1.2. Goals and Objectives

  • This section will explain how your current company goals are compatible with your export venture. List your overall company goals and your export goals and explain how the export activity contributes to the overall success of the company.

1.3. Product / Service Description, its Competitive Advantages

  • This section will outline your analysis of the export opportunity and your products/services’ role in the export market. Topic headings may include: Target Customer Profile, Required Product and Packaging Modifications for the Export Market, Life Cycle of your Product/Service.
  • Also describe the growth potential – the market’s potential return and the costs associated with the research and development of the market.
  • Describe what advantages your product/service has.

1.4. Product / Service Main Disadvantages, Weak Points
1.5. Experience in Domestic Market
1.6. Experience in Foreign Markets
1.7. Description of the Company’s Factory
1.8. The Company’s Organizational Structure and Staff Expertise

  • Management – Highlight the company’s ownership, its organizational structure; identify key personnel and any exporting experience they may possess.
  • Export Team – Outline the preparedness of your staff to ensure their commitment to your export plan. Assign specific individuals to positions they have experience in and explain their international skills and knowledge (language, logistics, international marketing, etc.)

2. Market Analysis

2.1. Identifying the Priority Target Export Markets

  • Outline why the selected market is your most appropriate foreign destination.

2.2. Identifying Products to Export
2.3. Position of the Target Market

  • Country Profile – This section will provide specific information about your selected country that may affect your ability to do business in and with that country.
  • Advisable to include: political, economic, social conditions, regulatory environment, legal structure, taxation framework, infrastructure conditions (roads, ports, communications, etc.), and cultural and business practices.

2.4. Competition

  • Industry Profile and Competitive Analysis – This section will outline the state of your industry in your target country and identify key competitors. Broadly identify key customers or end-users and competitors, while considering best business practices in that region.
  • The competitive analysis section will outline and highlight who the existing competitors are, the competitive advantage each of these firms represents.
  • Finally, identify existing sources of production, channels of distribution, typical marketing practices and common forms of payment.

2.5. Potential Export Cooperation Partners

3. Product Manufacturing

3.1. Export Production Deployment
3.2. Current Capacity of Production
3.3. Capacity Building Plans
3.4. The Necessary Adaptation of Product

4. International Law and Legal Issues

4.1. Sales Agent / Distributor contract

  • Commissions, territory, duties, authority, termination

4.2. Intellectual Property

  • Patents, trademarks, copyright protection

4.3. Export / Import Legislation
4.4. Dispute Resolution in sales contracts

  • Mediation /arbitration clauses, law of contract, venue, atonement, and securing payment

4.5. Language Consideration

  • Which will be the preferred language used to bind the companies into a contract

4.6. Contract terms and conditions

  • Incoterms, currency of payment, method of payment, insurance

4.7. Quality Standards

  • Expected quality of product/service to be detailed in the contract

5. Personnel Strategy

5.1. Necessary Staff to Ensure Export Activities
5.2. Experience and Expertise of the Existing Staff
5.3. Personnel Training Needs
5.4. Need for New Employees in Long-term and Short-term

6. Implementation Plan

6.1. Target Customer Profile

  • Including direct customers, end-user profiles, and the total market size and potential for growth
  • Explain who will be your customer and why
  • Outline the potential growth of your new international customer base in your selected region/country

6.2. Foreign Market Product / Service Description

  • Outline the typical usage of by the end-user (what problems does your product/service solve)
  • Competitive advantage and market niche
  • Describe necessary product modifications, product and quality characteristics, any applicable product specifications standards (health and safety)
  • Labeling, packaging, language, life cycle of the product in the foreign market, and any applicable foreign intellectual property protection

6.3. Method of exporting
6.4. Pricing Strategy

  • Detail your product’s pricing in the foreign market, the price sensitivity of your target market, and explain why you have chosen a particular strategy
  • Include export costing analysis, pricing constraints, legislation and legal aspects (anti-dumping, price controls, etc.), current market pricing, price sensitivity (the market’s level of acceptance of a lower or higher price), and an outline of your market penetration pricing strategy (price skimming, penetration pricing, flexible pricing, static pricing, etc.)

6.5. Sales and Promotion Strategies

  • Detail your chosen sales and promotion strategies, describing the method: company representative, subsidiary or affiliated company, foreign agent, foreign broker, mail order/Internet orders
  • Notice that your promotion strategy will cover any marketing efforts your firm undertakes in the selected country; these can be a combination of any of the following: newspapers, magazines, radio, television, Internet, posters, flyers, letters, and any trade show/fair participation
  • Detail your after-sales service strategy (returns, repairs, warranties, maintenance, and communications), who and how will manage this important aspect of sales

6.6. Logistics and Transportation

  • Describe how your product/service will arrive in your target customer’s possession, from your production plant to the end-user
  • Outline the expected timelines between order processing and delivery (contract negotiations, production, invoicing, collections, deliveries, communications, etc.)
  • Choose the appropriate shipping terms – Incoterms
  • Detail your inventory control methodology, packing and marketing requirements, and necessary documentation (import, export, health, quotas, inspections, customs preapprovals)
  • Make sure you include your usage of professional services intermediaries (freight forwarders, customs brokers) and the required freight insurance

7. Financial Analysis

7.1. Facility and Equipment Requirements

  • Any capital expenditure items specific to your export venture

7.2. Sales Forecast

  • Number of units exporting, price/unit, total sales over 3 – 5 years, monthly details for month one

7.3. Cost of Goods Sold

  • Number of units exporting, cost/unit, and total cost of goods sold

7.4. Projected International Income Statement

  • International sales less cost of goods sold and international overhead expenses to obtain projected net profit

7.5. Projected International Cash Flow

  • Expected expenditures of cash and receipt of cash, consider the time elements from the Logistics and Transportation portion of the export plan

7.6. Breakdown Analysis

  • Number of units and dollar sales to cover cost of goods and international overhead

7.7. Financing Requirements

  • Identify term financing and working capital requirements, equity contribution and collateral available to secure needed financing

8. Potential Risks and Prevention Plan

8.1. In this section include all possible risks you may face with:

  • Country risk (assessment of the political, regulatory, and economic conditions and include solutions to these)
  • Commercial risk (assessment of creditworthiness, contingencies for non-performance such as default, refusal to accept goods)
  • Currency risk (contingencies for maintance of value)
  • Internal risk (contingencies for ensuring adequate manpower skills and availability control over production and distribution costs)
  • Market risk (contingencies for changes in domestic and foreign market conditions)

9. Review Plan

9.1. Operational review
9.2. Management review

10. Addenda

10.1. Background data
10.2. Research information