Can we grow our business by 10 percent next year? Is 20 percent reasonable? Where will the growth come from? Current customers? New customers? New markets?
How will we get there?
Chances are pretty good that as a business owner or manager you’ve thought about growth this year – more than once.
You may have held annual formal live meetings with flipcharts and slide decks and plenty of caffeine to brainstorm and develop your growth strategies. Or you may have had a few informal discussions at the golf course with friends asking for their feedback. Or as the sole owner of your company you may have worried about it daily, trying to tackle it by yourself among the thousands of other things you do each day to keep the company going.
However you’ve thought about it, you’ve thought about it. And you may have even put together a plan to do something about it.
However you’ve thought about it, or planned for it, I’ll bet good money that you’ve looked at one of four basic avenues (thanks to Ansoff’s matrix) to growth. You’re either going to penetrate the market, develop new markets, develop your products and/or services, or totally diversify. And you may be tackling a combination of these strategies simultaneously depending upon how aggressive your goals are where you’ve identified your best opportunities.
The Ultimate Cheat Sheet for Business Growth series
Since growth is such an important issues for the businesses we serve (small businesses in Kansas), we’ve decided to write a series of posts that we’re calling The Ultimate Cheat Sheet on Business Growth. This will be a series of posts that we’ll use to develop cheat sheets you can use in your business. We encourage you to bookmark our site or subscribe to our RSS feed to stay up on new posts. Or you can just type “cheat sheet” in the search box on our site and pull up all the posts in the series.
In our first post, I’ll select one growth strategy – new markets (specifically exporting) – to get the conversation started. With each post, I’ll try not to overwhelm you with resources, but instead provide a few key sources that can take you to the next step in either evaluating or developing your growth strategy.
Exporting as a Growth Strategy
I’m a big fan of breaking down process (once I know where I’m going) into easy steps. Exporting can be broken down into easy steps to not only implement but to evaluate before you get started. You can find numerous short and informative posts on the subject. Here’s a few I like: 10 Questions to Ask Before Expanding Overseas, 5-Step Primer to Entering New Markets, and Going Global: How to Expand Your Business Internationally.
And you can even find a short quiz or two online to help you think about what you need to have in place to consider exporting as a growth strategy.
But, if you’re like most of us, reading and taking quizzes still isn’t enough to make you feel comfortable. You need someone to talk to, bounce ideas off of, play devil’s advocate. You need someone to help you look at how exporting as a growth strategy fits into your overall business.
You need someone who can help you think through the questions that really help you dig deep enough inside your business to make solid decisions. Do we have the capacity? What impact can this have on our cash flow? How will we manage new distribution partners? What will this do to our marketing?
Exporting: Increasing risk or reducing risk?
Any growth strategy involves risk. Yet exporting often gets a bad rep, often dismissed as the highest risk. But going into a new market with an existing product or service is really market development not pure diversification (new market and new product).
What gets ignored often in the risk discussion is the reduction of risk against economic uncertainty. By selling outside domestic markets, businesses actually reduce their risk by selling in markets that are somewhat insulated against domestic volatility. Think of it as diversifying your customer portfolio.
Another fear that seems to hold businesses, especially smaller operations, back from expanding through exporting is finding those one or two team members in the business that are responsible for the exporting process.
Where will you find them? How will you train them? What it we export to more than one country? What about all the language and cultural issues? What happens if they leave?
Just as you wouldn’t build a sustainable business on one customer, you shouldn’t build a sustainable exporting strategy on one person.
The great thing is that the process of exporting already exists. Using existing process (and the resources that go with it) reduces the risk for you as a business owner by using the process versus depending upon the person(s). In the popular E-Myth series, Michael Gerber identifies process, and more importantly, documented process, as a critical key to successful business growth. The Kansas SBDC can help you build a documented process as part of our consulting engagement with you. As a business owner you can tap into the resources you need from analyzing markets via market research resources to transportation to payment collection. We’ll post more on the process over the next few weeks.
In the meantime, to talk to an objective third-party (another option for reducing risk) that can help you assess if exporting is a viable growth strategy for your business, contact your local Kansas SBDC. Kansas SBDC consulting is confidential and at no-cost to your business.
Not quite ready yet? Then bookmark this page, subscribe to our RSS feed, or check back soon and search for “exporting” on our website.