With the soaring Australian dollar this may not seem the best time for SMEs to be exploring overseas markets. Nevertheless with a still buoyant Asian economy on our doorstep it is an unambitious SME owner who does not at least investigate opportunities for their business in this market.
Daunting as this may seem, you do not have to do it alone. Federal and State governments and industry associations all provide assistance for Australian businesses looking to expand overseas.
Most people are aware of the Export Market Development Grants scheme provided by the Federal Government through Austrade. This scheme is aimed at encouraging SMEs to develop export markets and reimburses up to 50% of expenses incurred on eligible export promotion activities above a $20,000 threshold. The scheme is not limited to the export of products but also covers services, including inbound tourism, and the export of intellectual property and know-how. (However you cannot claim expenses that relate to business with New Zealand, Iran or North Korea – a curious group for New Zealand to belong to.)
The promotional activities that may be claimed include the cost of overseas representatives, market consultants, marketing visits, communication costs, product samples, trade fairs and seminars, promotional literature and advertising (including website development) and costs of bringing potential overseas buyers to Australia (subject to caps). Also covered are the costs of overseas registration of intellectual property, such as patents and trademarks, up to a cap of $50,000 per application.
Austrade is the Federal Government’s export promotion agency and, in addition to the EMDG, it provides a number of services to would-be exporters, such as the TradeStart initiative which provides a national network of export advisers to assist SMEs to commence export and convert irregular exporters to be sustainable exporters. It also runs workshops for new exporters and a Women in Global Business Program which provides programs, networking, training and business assistance to women in export businesses.
Austrade also produces a guide, ‘Getting Ready for Export’, on the first steps to preparing a business for export. It includes financial issues such as ensuring the business has the financial capacity to expand into overseas markets, determining the budget you will need in the early years, and consulting your banker and accountant early in the process.
The Federal Government, through the Export Finance and Industry Corporation, assists exporting businesses, including SMEs, by providing finance and insurance facilities to support their export contracts, including contract bonds and documentary credit guarantees.
Apart from Federal Government assistance, the State and Territory Governments provide a considerable amount of assistance to exporters.
It can be intimidating to arrive in an overseas country, especially a non-English speaking country, and try to develop contacts from scratch. Most State governments arrange trade missions which take groups of business people to strategic overseas markets and arrange meetings and presentations through which the business owners can develop networks, explore market opportunities and gain market knowledge.
State and Territory governments also often assist businesses to attend international trade shows through government organised exhibition space which can be shared between businesses located in the relevant state.
Most of the State and Territory governments provide networks, training and mentoring to new exporters. Some assistance is financial, such as the First Step Exporter program provided by Victoria’s DIIRD, which gives funding (up to $10,000) to Victorian companies looking to research and investigate export opportunities. DIIRD also has Access programs, which provide the use of Victorian Government Business Office facilities in America, China, India, Japan and the Middle East free for the first two weeks and then at USD250 per month for up to three months.
The ACT Government also provides In-Country Assistance such as in-market business matching and appointment scheduling.
New South Wales has the NSW Export Lab which is a free program of events aimed at providing the information exporting businesses need for success in international markets, including building market knowledge and export skills. The program includes ‘Winning Business and Investment with India and South Asia’ which will be presented in Sydney on 3 May 2011. The NSW government also offers specialised workshops for new exporters.
The South Australian Government has an export roadmap and recently held a Gateway to Asia Exporters Expo.
Western Australia has a WA Global Network that assists WA business to capitalise on international export and investment opportunities.
In Queensland the government has export market teams that cover key export areas including Asia and the Middle East. These people have high level contacts in key overseas markets. Queensland also has 10 overseas trade and investment offices.
Tasmania has an export market assistance scheme providing market research and trade show assistance.
Apart from government assistance, business associations such as Australian Industry Group, ABL and ACCI offer export services.
Business owners with an appetite for export, or even just a curiosity about their export potential, can make a start by going to www.austrade.gov.au/Getting-ready-for-export which will also direct you to support services provided by government, private sector and industry associations in your state or territory.
All these organisations recognise that most businesses, especially SMEs, do not have the resources needed to tackle overseas markets.
So, if you feel Asia (or anywhere else in the world) beckoning your business, be encouraged by the fact that you don’t have to take that big step alone.