International Business Plan How To

1. Executive Summary

As the title says, this is basically a summary for the entire business plan. Even though this part is presented first, it should be written last, after you have finished writing the whole plan. This way, you have a more clear idea about the broader things in your plant that you are summarizing.

2. Long-Term Goals

State the reasons why your business exists and define the long-term goals of your business. Things like where do you see the business in 10 years? How will international trade help or affect your business? Also include targets for more narrower horizons, like 1-3-5 years. Articulating these goals, will give your business efforts more focus in the long run.

3. Purpose

Basically what is the purpose of your business entering the international market or getting into the business of exporting. Outline and study your purpose for entering the international market. Also point out more specific goals such as sales volume expected, gross profit, and any other objectives that may apply.

4. Industry Profile/Competitive Analysis

Conduct some research on the industry you plan to expand into, and look at how the industry is performing on a global basis. There are a number of things that should be considered, like how competitive is the international market? What are some future trends? Is the business seasonal? What does the regular business cycle look like? Also try to find sources of industry information, like trade associations, government statistics on the industry. Look at cases of how businesses like your’s have performed in the international market. Check the import and export regulations of the market you are targeting. What will growth look like in the international industry? These and many more questions will have to be answered, if you wish to have a true idea on what the international market looks like.

5. Approach to Exporting

There are many things that go into figuring out the logistics of exporting. Such as whether to use direct exporting? There are many things that have to be considered like establishment of distribution networks, performance of functions involved in exporting, and aftermarket servicing. For indirect exporting, you will need to hire an Export Management Company(EMC) also known as and Export Trading Company(ETC). You can also contact an adviser at the US Department of Commerce. You will also have to consider the hiring of outside bankers, lawyers, accountants, and export consultants. So there are a lot of things that go into this process. It helps to start slowly, so you don’t make major mistakes.

6. Identify Products and/or Services

Figure out the products you plan to sell internationally. Then describe them in various ways, such as the function it serves, why customers value it, and the problem it solves. Just like in domestic markets, products that do well in foreign markets are those that satisfy an important need. Point out your products strengths and weaknesses, in comparison to rival products. Also determine what levels of inventory will be necessary.

7. Target Markets and Customers

You must identify which foreign markets offer the best prospects for your products. To do this you should start by identifying 3-5 countries that have purchased the most of your kind of products in the past 3 years. Do a mini analysis of those markets, in order to gain a better understanding of the markets your selling into. Questions like, which countries offer the most potential?, which countries have high economic growth rates?, which markets are expanding the most for your product?, what might me projected sales levels?. These kind of questions should be answered in order to figure out the best markets for your products to sell into. Also try to identify local agents, distributors, or market consulting companies in the countries you plan to expand into.

8. Distribution

Figure out the channels of distribution you plan to use in foreign markets, such as retail or wholesale. Then make sure that these channels would work in the country that you plan to sell into. Try to assess the costs of what distributing through these channels will cost. Also try to figure in the quality of the local infrastructure into your costs, because things like poor roads or slow rail links can dramatically change your cost structure. Basically plan out your logistics for getting your product into the target market, things such as transportation, insurance, required documentation, and terms of sale.

9. Advertising/Promotion/Pricing

A new foreign market requires a different type of advertising approach. Since, foreign markets usually differ culturally from domestic markets, firms have to tailor different marketing strategy fore each foreign market. Figure out how your advertising campaign will play out in the foreign markets your selling into, make sure it takes into account local cultural attitudes. For example, a brand like Victoria’s Secret would have to figure out a different way to market in culturally conservative countries. Then there is the promotion strategy. It is essential that you have a local promotion strategy for each market, because different incentives motivate different people to shop. Then finally there is the pricing strategy, this will make the biggest difference in your product’s success or failure, because different markets have different price levels. For example, when Ikea opened its first store in China, store managers noticed that customers would never buy anything but would come into the store to take advantage of the free AC and clean bathroom facilities. When it came to sales, the Chinese customers would walk across the street to local knock-off produces that sold furniture at a much cheaper price. As a result, Ikea drastically slashed its prices to get customers to shop at its stores. Keep examples, like these in mind when determining your own pricing strategy.

10. Financial Projections

Determine overhead costs for exporting, legal fees, accounting fees, advertising, travel, and etc. Be as thorough and detailed as you can be when determining the fiscal projections for your business. It would also be a good idea to be fairly conservative with your sales projections and cost projections. This will keep you from being overconfident and hedge against any nasty surprises.

-Jay Zadey

Awe, Susan. Going Global. Libraries Unlimited. Santa Barbara, CA. pg109-111

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  1. […] Making the best choice means being informed. Whether you are learning about global trade, international business planning, or incorporation, the business that knows more, gets more. As a small business owner, you […]

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