Managing the bottom line of a company is a constant balancing act. You either increase revenue or decrease cost. There are many avenues that impact these elements and one is to expand the market.
Expanding a company’s market includes offering a new product line, offering different variations to the product, or a geographic expansion. A growing geographic market is our neighbors to the south — Mexico. Many American companies are partnering with Mexican companies to export goods and services, according to industry watchers. Mexican and USA companies are looking to partner with USA companies that desire to provide goods and services for the Mexico’s economy.
Deciding to expand a company’s portfolio to an international market requires planning and qualifying. A basic qualification to consider before expanding internationally is the life of the business. A nascent business should wait at least until the second anniversary of the business before venturing to export.
Another basic qualifier is to prepare an international business plan. Once these two qualifiers have been met, the next steps vary.
A business must have adequate financing to cover cash flow imbalances. The timing between shipping of products or delivering services and receiving of payments can be longer due to custom issues, currency exchange rates, transportation, and the foreign county’s political or economic environment.
In addition, an attorney knowledgeable in the foreign country’s business law is a great asset. Many foreign companies in particularly Mexico work with companies “who know someone, who knows someone…” when there is a need for a product or service. Having access to consultants whom have a working relationship is a valuable resource to the business owner.
According to International Business Consultant Adrian Childers, “The biggest opportunity for small business owners in New Mexico is to sell to the maquiladoras or Mexican factories just a few miles south of the U.S. Mexican border.
After speaking to dozens of maquila buyers at the June 16 NAFTA Institute Conference in Sunland Park, exporting consultants have identified several products and services that are in demand.
We are committed to making sure New Mexican companies are supplying the maquiladoras as opposed to companies in other parts of the country and the other side of the world.
For businesses looking to increase income by expanding their market, exporting is a viable option.
Sandra Taylor-Sawyer is director of the Small Business Development Center at Clovis Community College. Call the center at 769-4136 or visit www.nmsbdc.org/clovis