Business mentor: World is yours but plan well

Q. I'm offering a quality product and have many delighted customers. I'm ready to think about exporting. Can you give me some tips on things I should be considering?

A. Miles Valentine, CEO of Zeacom, the Westpac Hi-Tech 2003 Exporter of the Year, replies:

One of the first challenges is deciding which markets you are entering. Australia is often the first step for New Zealand companies because of its proximity and similarities.

One of the key differences is the tougher business market dynamics of the Australian market which make it a good stepping stone for the Untied States or Britain.

In selecting a market, be sure that it is one with lots of buyers who can both afford to buy your product and be persuaded that they need it.

One of the benefits of entering larger markets is the scale of vertical markets. We sell call centre software for the small to medium business market, so when we sized up the US market, one of the most promising opportunities was our ability to penetrate these large vertical markets.

In selecting a market, you need to first focus on doing your research and becoming familiar with the market. Be prepared to attend trade shows, network and get support from relevant trade and industry associations. Get to know your competitors and potential partners.

We learned that today's competitor could actually be tomorrow's partner. If you are serious about exporting, make sure you are willing to get on a plane and at some time base yourself in that market.

Finding the right partner to help establish your business in a new market is critical. Your first partnership won't be your last but it could be the one that determines the speed in which you succeed in a new market.

Set measurable performance goals to make sure the partnership is accountable. In the initial negotiations, know your walk-away position and stick to it.

Exclusivity can also be dangerous in larger markets where multiple channels exist. Whilst a good lawyer can be expensive, we found it essential.

When negotiating price, discounting early is a trap. If you need to provide added value, see if you can find another sweet spot such as bundling in added product functionality. Remember a partner strategy without deadlines is just a wish list; always ensure you have clear and accountable action plans.

One of our toughest lessons was that the partnership always took three times longer and twice as much money to achieve our goals, so plan for this.

Even though I have spent nearly five years in the US bedding in our office and the business model, I always knew that NZ was home and that our strengths as New Zealanders was driving our success.

New Zealand breeds strong generalists. The ability to export this talent into less flexible overseas markets where they struggle to scale helped us enormously. We ensured our overseas offices always had NZ staff in them who could take our passion and knowledge of the business into new markets.

While being Kiwi had its pluses for us, we learned early on to play down the tyranny of distance of our market and the risk of being seen as an outsider.

It was important for us to appear Australian, American or British when we sold into those markets, so in many ways you need to be Kiwi at home but locals abroad.

Practical ways to keep the costs of running businesses overseas also help. Basing your research and development in New Zealand can help deliver cost-effective product. Never test your product in the export market - you can not afford to make mistakes in new markets.

Persistent passion was the driving force that kept us afloat. To succeed in the export game, you need to keep the home fires burning whilst you ignite new fires abroad. * For more information telephone (07) 928-8778 or email calum@sustainable.org.nz

* Email us your small business question. Answers are courtesy of Spring - A State of Mind for Business.

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