Learning to Export

The true and false of the export for SMEs.

Jaime Hidalgo, expert in foreign trade, commercial director of Chile, demystifies myths and / or fears that exist among small entrepreneurs when facing an opportunity to export. Hidalgo resorts to the concerns of many SMEs with which he has worked and which he considers relevant to declassify, and in this way, tear down barriers or beliefs of the entrepreneurs themselves and that slow down their potential growth.

"Large volumes of production are required to just think about exporting." FAKE!

In the first instance, a large investment is not necessary, the ideal is to start small. While production can be increased, this does not necessarily mean tripling. When they think about exporting, they believe that they must increase the volume of the product, expand the plant and hire more people, dedicating all their efforts and resources to work in that direction before finalizing the commercial agreement, running the risk of staying with a lot of money invested. 

Setting up a business abroad takes time. The enchantment phase between a producer and an interested importer is long and, often due to anxiety, it becomes "I tried to export, it didn't work for me and I went under with the investment." The key is to have a planning strategy, with support to guide you, and to make a process profitable and sustainable over time (all the costs required by the export process must be within the planning).

"When there is an economic crisis in the country, it is not a good time to export." FAKE!

This last time of social and health crisis that affects the economic sector, has shown that a good option to sell what is produced, are the international markets. In this sense, waiting for the country situation to change to resume the sales of your products is not recommended. With the help of technology and the relevance of e-commerce we found a business opportunity in other countries. 

If we talk about SMEs with gourmet products in Chile, they depend a lot on emporiums, specific stores and the Marketplace, but they do not achieve significant sales volumes. When there is a crisis and the country is not growing, international markets have tremendous potential because, mainly, there is no limitation in purchasing power. Food products produced by SMEs, in general, are more expensive and the market is not massive. 

When you think of markets like the US with 300 million inhabitants, or in England or Spain with 40 or 50 million, or in Central American countries with 5 or 6 million, you can expand your potential customers and add new consumers. When exporting is carried out, production volumes increase, therefore the company grows, costs fall and you achieve economies of scale.   

"If I don't have enough financial resources of my own, I can't think of exporting." FAKE! 

There is a tendency to think that to export we need more resources, and although there is an investment in the process, there are instances to obtain funds, such as public resources offered by Sercotec, Corfo, ProChile, etc. Depending on the business model, costs, and the expansion project, you can request bank advances to fulfill an export business. This is unknown to many SMEs, but the banks have financing lines that have Corfo guarantees, without requesting an explicit guarantee from the SME, and that are subject to the results of that business.

"Associating with other brands or products is a good export strategy." TRUE!

Associating with other brands or products strengthens your positioning abroad and reduces the uncertainty of the first operations. This collaboration strategy is awarded both by financiers and foreign importers. In addition to reducing risks and presenting a greater number of products to different markets, it represents significant savings in terms of logistics, promotion, image and training. 

"Disinformation plays against when it comes to wanting to export." TRUE!

There is a lot of misinformation about the world of international business. There are few talents with experience, specialists and platforms. Although, from the public sphere, there is ProChile that promotes initiatives such as workshops, talks and trainings, there is no deeper support and accompaniment in the process. 

The great pain of the small producer is the time to increase their knowledge, so it is essential to seek advice that provides practical tools adjusted to each reality. The international market is complex because each destination has specific requirements and each market works differently, with different actors, regulations, trends and preferences. 

Disinformation produces fear. The best thing is to outsource functions that are related to exports and all the procedures that this entails, since the micro-entrepreneur must focus on what he knows how to do well, which is to produce: Be careful! Although a foreign trade advisor is a facilitator of the processes, the entrepreneur must always be willing to learn from the process to control what is done.

"It is possible to export if the product is not yet consolidated or massed in the country of origin." TRUE!

Covering national markets and exporting are processes that can be carried out in parallel. They are not exclusive to each other. You can be in full growth in the national market, and project the internationalization of your value proposition. That is, prospect them, know the trends and searches for importers. All of this takes time, requires dedication, so the earlier you start planning the possible export, the better. Prospecting does not necessarily imply the decision to export, let alone increase production. Before getting married, meet and polo to find out what is the best alternative and achieve a successful match.

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