We’re profiling some of the great work done by The Icehouse partners. This article by James & Wells, the intellectual property law firm, was first published in Bay of Plenty Business News.
The decision to export your product or service from New Zealand can be exciting and overwhelming. Exciting because it represents an opportunity to expand your business and conquer larger, more lucrative overseas markets. Overwhelming because there are so many things to consider and deal with before you take the leap.
Fortunately, there are many resources available to New Zealand businesses with export aspirations. Government agencies including Export New Zealand, New Zealand Trade & Enterprise, and the New Zealand Customs service, as well as your local Chamber of Commerce, are all great places to start.
There are also many private sector organisations that can offer export assistance and advice in particular areas: for example international market research, manufacturing and sourcing, financing, regulation and compliance, intellectual property services.
Preparation is vital, however – and the more time you invest in developing your export strategy upfront, the higher the probability of success.
All too often we hear of New Zealand companies that have launched into international markets only to discover the hard and expensive way that they weren’t sufficiently prepared.
At best, this might cost your business valuable time, money and resource; at worst it could cost you your business.
To mitigate the many risks and challenges associated with exporting, we recommend you consider, and where necessary, seek expert advice or services in the following four key areas:
| Go-to market strategy
Research and understand everything you can about the markets you wish to enter. How do cultural and business practices differ? What regulatory or compliance requirements might affect the marketing or sale of your product or service in that market? What’s your distribution strategy? Who is your competition? Do you have a good understanding of your target customers’ buyer behavior and preferences? Will your product or service need to be modified to meet these? What criteria can you reliably use to determine the relative attractiveness of different markets?
| Export finance
Determine as early as possible, your capacity to invest in export development.
In addition to the pre-export costs (for example, in-market research, brand and product development, professional services associated with establishing the appropriate company structures etc), what will it cost to manufacture, distribute, promote, sell and support your product or service in or for that market? This is an area where many Kiwi businesses come unstuck.
To become a successful exporter costs money, and time. Understand what your export financing requirements are likely to be way before you need to seek external sources of capital by formulating a solid financial forecast and plan.
| Channel strategy
Depending on what type of product or service you market, your choice of channel strategy can have a significant impact on the speed with which you can scale up, as well as the cost and ease of doing so.
If a third-party distributor or partner is required, take care to choose the right one and ensure you put the appropriate terms of trade and contractual arrangements in place.
It’s worth bearing in mind that this process can take several weeks or months so be sure to factor this into your launch plan.
If you decide to market directly via an online store, for example, then consider how you will handle fulfilment of orders end-to-end. Do you have sufficient stock? How quickly can it be replenished? How will you handle order fulfilment and post-sales support?
| Intellectual property strategy
If you are using a successful domestic business as the springboard for global growth, there’s a good chance you’ve already built a great brand or technology, or both.
To avoid the disappointment of not being able to use your existing brand in an overseas market, or of someone else potentially cottoning on to your invention and leveraging it for their own gain, it’s a great idea to identify what IP you own and can protect, and where and how to protect it.
This is an area where the cost of the advice and services you receive will be far outweighed by the benefits you can derive by securing full protection of your ideas, designs, brand or technology in the markets in which you wish to operate.
| Reward over risk
Building up a successful export business can be a very rewarding and prosperous journey. Ask any business owner who has done it, however, and they’ll almost certainly tell you that it’s not without its stress or risks.
Carrick Robinson is a Partner at James & Wells intellectual property law firm, specialising in all areas of trade mark law.
James & Wells are one of New Zealand’s largest, privately owned, patent and trade mark attorney firms. Their award-winning team is widely recognised as one of the very best in Australasia.
Visit the James & Wells website.
For more business ownership and leadership advice check out more of our blogs.