Having a great product or service, and an interested market, does not spell success. There are other considerations. LYNDA SLAVINSKIS
By Lynda Slavinskis
A new client came to see me just the other day very eager to discuss legals for his proposed exporting ventures. He wants to export Australian wine and Australian beef and import spirits, has had some conversations with contacts in his home country who are keen to receive Australian wine, and has even had some conversations with beef and wine producers here in Australia.
He had even done an extraordinary amount of research about freight, licences, customs and the like. He thought he was ready.
I was not convinced. I asked him a few choice questions and his answers confirmed my suspicion that there was a lot of work to do before we got even close to legals:
- Do you have an export plan? No.
- Have you worked with an export adviser? No.
- Have you worked out your pricing? No.
- Will you be an agent or a distributor? Don’t know.
- Do you know who your target market will be? No.
Before launching into drafting of legal documents, exporters need to produce an export plan. This plan should include all the things a normal business or strategic plan would include such as a SWOT analysis, cashflow projections, profit projections – but even more importantly, in export, a pricing strategy and even a disaster recovery strategy in case your manufacturer goes on strike or goes broke.
The exporter needs to consider the pros and cons of the type of relationship to be entered into with the importer and what each parties’ rights and obligations will be under that type of relationship.
It is still a good idea to seek legal advice to determine some of these things and I congratulate my client on having the foresight to seek legal advice at such an early stage, but a lot of footwork and homework must be done to decide exactly what you want from a deal before committing it to writing.
Planning is the key to a good exporting relationship. Planning takes time and effort. Just because you have someone interested in your product doesn’t mean you are ready to export.
Lynda Slavinskis is an outgoing, intuitive and commercially savvy lawyer. She has worked in-house at Sussan Corporation and Tattersall’s and now assists small and medium businesses with import, export, leases, franchising, employment and general business advice as principal solicitor of Lynda Slavinskis Lawyers & Consultants. Lynda is on the Victorian State Government’s Small Business Advisory Council.