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Why Start an Import/Export Business?

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One Man's Import is Another Man's Export

Is it really worth the hassle? Shouldn't your company just concentrate on doing what it does best in its domestic market and leave the headaches associated with import and export to others?

According to the World Trade Organisation and they should know, the value of goods traded across the world reached an astonishing $10 trillion dollars in 2005. For those of you whose eyes glaze over at large numbers, that's 10 followed by 12 zeroes ($10000000000000). Since a recession in one part of the world is generally offset by a boom in another, the growth in world trade never seems to slow. So the question is not should I set up an import/export company? - but can you afford not to set one up?

The growth of communications means that the world is shrinking by the day. New suppliers and new markets become easier to reach and the opportunities for business growth are immense. Great strides are being made to regulate, liberalise and encourage world trade so that we can all benefit from the free movement of goods and services. Unfortunately, a number of small to medium sized businesses who might profit from taking part in the global economy are put off by the barriers to entry. A major disincentive is the fear that trading abroad might cause more problems than it's worth. Managers talk about all the hassle they're likely to face from foreign contracts and payment and translations and customs and shipping and so onů

The good news is that of course these barriers are easily surmountable. Humans have been trading across continents for thousands of years and there is no aspect of import and export that hasn't got an easy and cost effective solution. Specialist services exist to bring buyers and sellers together and regulate the trade to the benefit of both parties.

If, having considered the potential pitfalls, you still think you can make money in import/export, the next step according to all the experts, is to create a detailed business plan which will require a lot of market research.

Import/export can be as simple as setting yourself up as an agent, bringing two parties together and taking the middle man's cut. Or, you can expand your existing business to take advantage of foreign markets, while realising that the fundamentals of trading with foreign companies remain the same as doing business at home. There are extra regulations and cultural differences and language barriers but at the root of the matter, trading across borders is no different to trading within borders, there are just some further costs to consider.

The fundamental step after you have carefully established the fact that there is a need for a particular product to be shipped from one country to another, is to examine these extra costs of doing business internationally.

A good starting point for this kind of research is to discuss your project with trade organisations. Another important step would be to talk to one of the government departments who exist solely to make life easier for import/export companies. There is generally no need to create a new company purely for the purposes of trading abroad but particular legal and financial constraints may apply.

Once you have incorporated the costs of import and export into your business plan and ensured that you can make a profit, it's time to put your toe in the water and tap into the global trade that is making a small number of people very rich indeed.

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