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FORUM EXPORT
How to set up your business for success in export markets Philip Smith outlines five top tips to set up your manufacturing business for exporting success. Are you a manufacturing business looking to export, but unsure about where to begin? As the Government’s export credit agency, we provide financial solutions to help Australian businesses take on the world. Working across a range of industries for more than 60 years – such as manufacturing – we understand the domestic and global markets. Here are our five top tips to give your manufacturing business the best chance for export success.
1. Ensure you have enough cashflow For many manufacturers who export, there is often a long lead time from the point of delivery until the receipt of payment. This could greatly impact your cashflow. To address this, try to arrange more favourable payment terms with your long-term customers. Another solution may be arranging external finance to maintain cashflow and your operations moving. Understanding how to manage your export cashflow will be a big help.
2. Get ahead of customer demand Winning a major contract or experiencing high customer demand is a positive outcome for any business. While this may boost your profits, it may also mean you need to ramp up your operations quickly to meet a sudden spike in demand. This could involve ordering more inventory or hiring more employees and you may need additional finance. To help, Export Finance Australia offers a range of financial solutions that could support your business to take on these new opportunities.
Case study: Nature’s Dairy Australia One of our customers, Nature’s Dairy Australia, is a business which locally sources, manufactures and packages milk from across Victoria. Approximately 65% of what they produce is exported to Asia. But as a relatively new business, they needed financial support to help them meet the growing international demand. “Nature’s Dairy Australia being only a few years old, we have a huge amount of growth ahead of us,” said their Chief Executive Officer, Bevan Tippett. “But all of that comes with cashflow implications, and so we needed some assistance to fund that continued growth of the business. That’s how we came to talk to Export Finance Australia.” Our $2.6m Export Line of Credit facility is helping Nature’s Dairy Australia finance the working capital funding requirements of their business operations, particularly as sales volumes increase. This enabled them to develop new products and fund equipment specifically for exports – while meeting international demand.
3. Develop your export strategy If your business is in expansion mode, you may be looking to branch into new markets. But remember, each market has its own challenges and risks. When targeting a new export jurisdiction, it’s important to do your research. Understand the trade laws, banking systems and the reliability of their shipping and delivery schedules. This should all form part of developing your export strategy.
AMT DEC/JAN 2021
4. Seize international opportunities To export successfully, your business needs to be open to international markets and seize those growth opportunities. This will require you to build strong business relationships in your overseas markets or in your supply chain. You may even need to set up physical offices or shops in key markets, or import your materials. Making sure you have access to the finance you need is crucial in expanding your business internationally.
Case study: BirdDog Australia BirdDog Australia designs and builds high-grade cameras and livestream software for homes, offices, education institutions, stadiums and houses of worship around the world. As the demand for video capability dramatically increased during COVID-19, BirdDog Australia absorbed the pressure on their supply chain and manufacturing business operations. Having identified the need to fund growth with additional cashflow, BirdDog Australia was recommended the support of Export Finance Australia. Our Victorian Business Development team worked with BirdDog Australia to understand their business and helped them secure the right financial solution. We provided a working capital facility to assist BirdDog Australia increase its manufacturing output, maintain large orders and keep up with growing demand. Our support also meant that they could win business opportunities for international growth. “Without Export Finance Australia, we would have merely grown at a moderate rate, and missed out on export opportunities across the globe, thereby stifling the business and our trajectory,” said their Chief Financial Officer and Finance Director, Barry Calnon. “We’re going to keep growing and enjoying the support that Export Finance Australia have given us.”
5. Protect against risks Working in overseas markets could expose your business to a range of risks. Researching on country profiles could help you understand the different risks of doing business around the world. Particularly with financing, it’s important to negotiate payment terms that work for you – for example, securing a deposit up front. You should also choose a robust payment method to protect yourself from any payment risks. Our range of financial solutions, including loans, bonds and guarantees, cold help your business offset such risks.
Talk to us. We’re helping manufacturing businesses take on the world, and we could help you. Talk to us about our range of financial solutions. Call our experienced team on 1800 093 724 or visit our website Philip Smith is Business Development Director, VIC & TAS, Export Finance Australia. www.exportfinance.gov.au
