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Broadening the base reduces costs.

Exporting accounts for $130 billion of our country's economy - a full third of its wealth, and it employs three million people.

However, it is not restricted to large corporate giants in our forestry, mining and manufacturing sectors. Many smaller firms throughout Northern Ontario are utilizing exporting as a means to lessen the impact of downturns in the domestic market.

Exporting is an ideal way to increase production levels and sales, while reducing unit costs. However, there are risks to avoid when you attempt to enter the export business.

International trade experts advise against exporting unless you have a stable domestic base. It is necessary to offset the high costs associated with establishing business in new markets.

For example, in some cases sales offices must be established in the country where you want to export your goods, staff need to hired and licenses and permits obtained.

It can cost as much as $50,000 just to attend trade shows in foreign countries. And it is only in rare instances that attending these shows translates into immediate sales.

Exporting is a long-term proposition, not a short-term solution to declining sales.

Exporting requires viable product management and a commitment to a well-developed strategic plan. The plan must address such items as market and product research, export pricing, financing, distribution and methods of credit collection.

The key to selling in export markets is building the client's confidence in you, your company and your product. Once a trust has been established, exporting could provide a substantial portion of your bottom line.

In general, a market study is required to assess the potential of targetted export markets. It should identify:

* similarities in business culture, practices and the law

* language and other communication barriers

* the stability of the market's economic and political environment

* direct and indirect barriers to market entry

* currency stability

* current market size and growth potential

* existing domestic and foreign competition

Foreign government agencies can be an invaluable source of business and trade information. In addition, there are scores of business, specialty and general interest magazines.

Additional country-specific information as well as financial assistance to new and existing exporters is available from External Affairs and International Trade Canada and the federal Economic Development Corporation.
COPYRIGHT 1992 Laurentian Business Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:Supplement: Small Business Survival Strategies
Publication:Northern Ontario Business
Date:Apr 1, 1992
Previous Article:Aggressive firms commit to marketing.
Next Article:Save Our North expands its horizons.

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