Should all small businesses become exporters?

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Many small business owners have been asking what it all means and what steps they should take next in response to the measures shared

Kudzai M. Mubaiwa
The past two weeks have been hectic for small business owners. After the Monetary Policy statement on the first day of the month, a longer document — the Transitional Stabilisation Programme, followed it (as promised) by mid-morning of the fifth day.

It has truly been a lot to take in and many small business owners have been asking what it all means and what steps they should take next in response to the measures shared.

There are various opinions on this but what is clear is that it is business unusual, and once again, as often emphasised in this column, time to revisit the business model!

With the current levels of uncertainty it has proven difficult to price as we discussed last week, but many players have been since been emboldened by on-going events and the fact that we are, after all, still under a multi-currency regime; and opted to exclusively accept payment in South African rand or United States dollar, as a measure for managing the volatility that is presently coming from bond notes.

The hope is that customers will want one’s goods and/or services enough such that they will make it their problem to obtain the hard currency for it and enable you to continue as a profitable going concern.

A layman’s reading of the monetary and fiscal policy in the past days would be summed as saying: foreign currency is important and will be accessed only by those that generate it.

For that reason alone, we must all aspire to be exporters. After all, these are the only folks that are guaranteed security of their foreign currency in the “nostro foreign currency accounts” — and can be able to thus objectively compare themselves to global peers on performance. But how feasible is this?

We once wrote on the many economic sectors in Zimbabwe and opportunities that could be found in each under this column, but we did not do justice to the potential each one had for small business owners aiming to export.

It was thus extremely comforting to discover, from our desktop analysis, how easy being an exporter is in Zimbabwe — or rather how accessible such information is through ZimTrade.

They are certainly aware that we can solve many of our economic issues if we can increase productivity and have enough resources to both consume and export.

Their approach gives some twelve perspectives to consider once willing to export. Here are some of the highlights and practical ways of acting on them as a small business owner looking to export.

You start by assessing the level you are at as an (aspiring) exporter. It is assumed that a company starts with no export activity, then exports occasionally, exports to some markets, then eventually exports to many markets.

You want to do internal checks to ensure that you indeed have an export value proposition and the resources to deliver product/services that solve the problem you identify in a specific market.

There are a lot of Zimbabwe specific tangible and intangibles that are desired and demanded outsides its’ borders — you want to make time and think on these with respect to the sector you are in. It will be necessary to consider whether you can then make available a quality product, on time, every time — through your internal resources.

ZimTrade ordinarily allows you to use their free online export readiness checker but it was not functional at the time of writing, and we hope this was due to a stampede of small business owners rating themselves and their products.

You must be able to clearly answer the question: what do I want to export, and do I make it?

Pursuant to pin pointing a specific product, one is required to select a particular export market for it.

This is informed by a longish list of considerations, some of these being the business environment and culture in the target country, policy and the regulatory framework, logistics and distribution, competition and risk.

Exporting is pushing your product in a market that does not deal with you out of sentimental sympathy but entirely because value.

The need for sound and thorough market research can indeed never be downplayed, and this must include both online and offline on the ground approaches to gain intimate knowledge of target territory, hearsay will not work.

This would inform an export marketing plan, through which you capture your detailed analysis, strategy and resource requirements. Execution follows straight after planning the work — one will need to work the plan.

The heaviest work is the marketing — in a new market your product starts off like any other little known one and then gains traction as it acquires users and can now benefit from the greatest marketing act: word of mouth!

In this digital economy every budding exporter can only be taken seriously if they have an online presence through a proper website.

The stakes are higher once you opt to export — everything branding must therefore be top notch and of global standard.

Assuming you have done all this correctly, you should secure your first sale and be required to deliver.

The requirement is that you have done the background work on the logistics around moving your goods between territories, sorted out all accompanying documentation, and be well versed in the appropriate terminology, risks and legal matters and of course payments!

Once one full cycle has gone through, yours it to learn from what went right and what went wrong, continue the good and correct the bad, and soon you will be able to enjoy the fruit of increased footprint. While these pointers simplify the process, the reality is that it will take courage, time and commitment to breakthrough.

However, this is a worthy exercise for those that desire to build companies that scale because doing in business in Zimbabwe alone will not allow any brand to scale notably.

Now is the time for local brands to push for presence in neighbouring countries, then the region and perhaps the continent and world in the next few decades.

May our situation stimulate us to broaden our spheres of influence, regardless of sector.

Exporting is not only for those that have made it big in domestic markets — it is feasible for anyone with a quality product who is wise, flexible and hard-working enough to put in the work in external territory.

Feedback : Email-kudzi@investorsaint.co.zw, Twitter-@kedukudzi

 

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