SME Overcoming Hurdles
On Wednesday 18th January 2012, the NOVA Committee of the Chamber will host a business conference at the Trinidad Hilton. NOVA works towards the development of our local SME sector through knowledge-exchange, strategic networking and issue advocacy. This year’s conference has been modeled around the action statement “Make It Happen: Success In Any Environment” and will deliver on all three focus areas.
Participants will interact with an eclectic group of industry specialists on issues specifically geared to improve their business such as effective human resource management, application of new media & software for improved efficiency and leveraging the support of government as a business facilitator. In addition, they will hear personal stories from keynote speaker Mario Sabga-Aboud, Chairman of the Pizza Boys Group of Companies, Claudia Pegus, renowned fashion designer and Neysha Soodeen, the force behind the internationally acclaimed MACO magazine; three individuals who have indeed made success happen.
The final session of the day will be facilitated by experts on credit risk and venture capital who will provide immediately helpful tips on the Dos & Don’ts for effective oral and written presentations when seeking debt or equity funding.
We hope to see you there but if not, this article gives a sneak-peek into one aspect of the conference session on “Successful Regional Exporting”.
Exporting can be one of the best ways to grow your business but for many small enterprises, the preparations appear so daunting that no definitive plans are ever made. In addition, it’s still a widely held belief that exporting is for larger companies with hundreds of staff, fancy lawyers and willing bankers. Though exporting has its risks, these can be diminished by detailed planning, regardless of your company size.
Benefits to Exporting
Increased sales and profits is the most obvious benefit to exporting and its positive flip side is a decreased dependence on your domestic, or any one market. These increased sales can come not only from the expansion of your production capacity, but also by the sale of excess items that would otherwise have gone to waste. As exports grow, so, naturally, does the business.
Disadvantages of Exporting
The hurdles associated with exporting for a small business are many; some real, others imagined, most exaggerated, but they do exist. However, the hurdles change depending on your specific business. What may be a problem for a business selling scented candles will not be an issue for an exporter of decorative glass artwork. It is important that the decision not to export or to delay exporting is based on a cogent analysis of the facts, and not be the result of untried assumptions.
High transport costs
Freight costs can make exporting uneconomical particularly for products with low value to weight ratios. For example, both a scented candle and a hand-etched figurine may be encased in glass and weigh the same, but the figurine would command a higher sales price and therefore be better able to withstand the costs associated with shipping such a fragile item.
Trade Barriers
With particular respect to CARICOM as a potential export market, trade is not as open as the ethos of the establishment of a single market would suggest. Each Caribbean country has widely ranging tariffs, quantitative restrictions and discretionary licensing. In addition, access to this information is not easy. However, given the potential benefits to exporting, it is worth getting the details behind the tariffs of each country whether CARICOM or not, that could be a willing purchaser of your goods.
Lack of control over distribution and marketing
This is a double-edged sword. Companies who wish to retain full control of their marketing & distribution channels face the hurdle of growing their foreign contact database and understanding the idiosyncrasies of each new market on their own. What works in T&T may not work in St Lucia but it’s a challenge to realise this without the benefit of hindsight. However, should a company decide to retain the services of a local agent, the risk is in that agent impairing the branding and image of a product through inefficient or unprofessional distribution & marketing practices.
Status of local vs. imported goods
Some markets put a qualitative premium on imported goods from particular areas. This often comes as a result of the national branding initiatives of the exporting country. However, imported goods may also come under fire and a business may find itself a victim of political bluster and turnabout nationalism. This is particularly true for T&T exporters in the CARICOM region.
Restricted access to financing
Small businesses face serious hurdles when looking to finance their domestic operations so receiving export financing is one hurdle to successful exporting that is neither imagined nor exaggerated. Businesses are faced with local bankers who neither know nor are particularly interested in your target market. Their working assumption will be that you know just as little as they do and therefore it is your responsibility to prove otherwise. A well-researched export business plan is imperative and to all the business owners who fear that getting too detailed encourages the theft of your ‘idea’, consider the fact that your unwillingness to properly present your plan results in your failure to receive financing and ensures that your idea remains just that – an idea without execution.
Exporting made easy with E-commerce
If you’d like to only gingerly dip your toes into the world of exports, e-commerce gives you the ability to choose the scale of production most comfortable to you, and then to sell your goods as well as your services to a global audience. Though you would want to avoid the hubris and then consequent downfall associated with the catchphrase that “everyone is an expert online” it is true that the openness, ease of access to information and the ability to teach yourself, makes online sales a great medium for small business exports. If you don’t have the capital to integrate an e-commerce platform into your website, there are many other websites which provide businesses with the opportunity to set up their online marketplaces.
Issues to look out for when making your e-commerce platform selections are: upfront deposits, credit card fees, length of time to repayment, access to several channels of technical assistance and ease of payment process for the customer.
Exporting magnified with Trade Shows
If you’re looking beyond web sales, consider becoming an exhibitor at local trade shows where the world comes to T&T as well as travelling as an attendee to trade shows in foreign markets. The Chamber of Industry and Commerce regularly plans trips to trade shows in markets already discovered as open and willing to do trade with T&T businesses. As an attendee, you can benefit from matchmaking services and Chamber-originated export research.
Exporting not only grows your bottom line through increased sales, production capacity and therefore economies of scale, but it goes beyond the figures to the development of your business and you as a business owner or executive. Entering a market not readily known to you provides a wealth of learning that improves your strategic thinking and benefits your competitiveness within the domestic market. Don’t let fear of the unknown restrict your business possibilities. There is nothing gained if you don’t venture.
To find out more about the conference agenda, the speakers and facilitators, read our blog at http://makeithappen-conference.blogspot.com or find us on Facebook at “Chamber SME Business Conference – Make Success Happen”.
To register for the conference, email or call Ms. Sharmin Boodoo at sboodoo@chamber.org.tt, 637-6966 ext 228
