International trade is and has always been the most profitable form of industry since the advent of business. Since Marco Polo or the cargo of spices and silk in the biblical age, export has been an integral part of not just money making but also globalizing the world and connecting different economies around the earth. With the current technological advancements in place, the import-export business has only become more and more profitable, rewarding and in terms of rendering personal satisfaction to the ones involved in the business.
There are various misconceptions that exist about starting an Import-Export Business and one of the most common ones is that it requires a huge capital investment. Through this article, we will guide you on how to start an import-export business even with less investment.
Busting the Myths
Before we begin, it is essential to bust a few common myths as what may be limiting you more than the lack of huge investment is your own outlook towards this business. Most manufacturers think that the import business is a big player game and requires huge investment, the same is false and only results in you losing out the opportunity to acquire a foreign market for your product. Another common myth is that great experience in the field is required and while the same may be partly true, it is definitely not a restrictive aspect. Experience can only come with practice and time and if you never try you will never be able to build the experience! Another common myth is that the export-import business is only meant for big manufacturers whereas, in reality, it is rather inclusive. Small businesses can also successfully import-export and penetrate foreign markets with their products.
Know Your Market
One of the first and most fundamental steps of any business including the import-export business is undertaking a market study; Ideally, the factors that you would want to look at before entering a new market. In the export-import business you need to assess the foreign market you are looking to export in, what is the economy like, what is the competition your product might face, is the pricing competitive enough, what are the legal and regulatory compliances that need to be taken care of etc., are some of the first questions that you must be researching on.
Managing Your Finances
After completing your market research, you would have a rough estimate of how much capital you may require to start an import-export business. Once you’ve chalked out the share that you can afford to invest, it is time to look for other avenues of investment. The most conventional ways to do this that also help in risk management are of course business loans from banks. But as we have seen in the past, getting investors on board is also a great plan when your personal investment is lacking. In such scenarios, your business plan is what you will be selling before you even begin selling your product. In order to get investors on board, you must prepare to present and market your business strategy, product and outlook to such investors. In such a scenario, networking is everything!
Networking & Angel Investors
As mentioned above, the only thing required to start an import-export business is not money but more importantly your network. If you can build a good network of other businessmen, manufacturers, investors etc. then you can easily seek help from them in setting up your business. Angel Investors in the last two decades have increasingly funded many small businesses. As these are wealthy private investors that are looking to finance small business ventures in exchange for equity, they are more accessible with a good network. Angel investors use their own net worth as opposed to an investment fund and thus the former enables the latter meaning, if you have a good network, your business can be on their radar.
Export Promotion Policies
The Indian government has time and again endeavoured to support international trade. Much of the investment has been made in market-related research and surveys and many trade fairs and exhibitions are organized by the Government in foreign countries to generate interest in our products. Bi-lateral trade agreements between our country and other nations have also helped improve the market conditions of exporters in the recent past. Additionally, the Indian government has put in place various policies and schemes such as the Advance authorization scheme, Advance authorization for annual requirement scheme, Customs, central excise and export duty drawback scheme, GST tax rebate scheme, Duty-free import authorization scheme, EPCG License, Market Access Initiative (MAI) scheme, Marketing Development Assistance (MDA) scheme etc.
Thus, gone are the days when international trade and the import-export market were captured by big players. In today’s world, even with less investment, you can find other avenues to set up and flourish an import-export business successfully.
