Are you planning to set your sights on a new export market, or even your first one? Alberto Silini, Head of Consultation at Switzerland Global Enterprise, lists the four stumbling blocks that turn up again and again.
1 Underestimating competition and expenses
Exports are often the result of an opportunity: someone approaches you at a trade fair, a customer provides you with a contact or the manager even has a private connection. It is great if links like these already exist – but they can mislead you into not doing your homework for a market entry thoroughly enough. Finally, it often takes years for an SME to establish itself successfully. Key questions should be:
Do you understand how your sector has developed in the country in the last five years and what trends are to be expected for the coming five years?
What legal requirements must the product meet? Are there registrations that have to be submitted or import taxes to be paid that could jeopardise the whole project?
What are the usual prices for your product? What other costs do logistics and distribution entail?
Who are your competitors? How are your products – and especially your services – different? Swiss companies often have superior products, but offering the necessary after-sales service in a faraway market can become a challenge.
Are customers already familiar with your product?
It is only with this information that you can calculate a realistic business case and carefully weigh the costs and benefits of an international project. Learn more about Switzerland Global Enterprise’s “Market analysis” service here!
2 Tying yourself to the wrong partner
Most SMEs take the first step into a new market in conjunction with a local partner. Together with it, they can gain initial experience, establish customer contacts and gradually expand their business. Central in selecting partners is that your own interests coincide with those of the partner. It needs close support in order to bring the products to the customer in a sensible way. Trust and understanding have to be developed at the same time, which is done differently in the US or even China compared to Switzerland. In cooperation with the Swiss Business Hubs and your local network, Learn more about Switzerland Global Enterprise’s "Business Partner search" service here!
3 Not placing enough importance on personal relationships
In many countries in the world – whether in China, Brazil, the Gulf states or eastern Europe – it is indispensable for the management staff of a company to meet potential partners, customers and government representatives face-to-face and discuss joint projects – not only in the conference room, but also on the golf course or in a restaurant. This should happen several times a year, over a longer period of time. An important success factor in the development of a new market is thus travel and personal meetings with potential partners, customers or government representatives. Lean more about Switzerland Global Enterprise’s "business trip" service here!
4 Not listening to your gut feeling
All the formalities are sorted out, the potential seems to be secured, you have a potential partner in mind... but you don’t feel comfortable in the country, you think the food is terrible and you have trouble dealing with the mentality of the people? Then take some time to reconsider things. You will have to travel to the country often to build your network. You will spend a lot of time trying to understand the market to drive forward your business. If that is something you cannot imagine, you might want to consider a different market.
Switzerland Global Enterprise (S-GE) is a non-profit organisation mandated by the Swiss government (SECO) supporting Swiss exporters in their international business.