Export Knowhow

Ten tips for a smooth export entry

Switzerland is an export country: in 2018, goods worth an impressive CHF 233 billion were exported - a new record. But Switzerland is also an SME country: 99.7 percent of all companies have fewer than 250 employees. How do entrepreneurs of this size make the leap into successful internationalisation?

Start-up

At the start of internationalization, there are a number of challenges to overcome: Competition in foreign markets is intense, the supply is large and the financial and time resources of companies are often limited. The entry is successful if the relevant questions are clarified in advance and the procedure is tailored to your own company. After all, the path to export is individual for each company. These 10 tips provide initial assistance.

1. Choose the right business and sales model

A business model that works well in Switzerland often cannot be applied 1:1 to a target market. A basic question therefore has to be clarified before getting started in international business: export or internationalization model? With the export model, an SME acquires international customers from Switzerland itself or works closely with partners. With the internationalization model, a Swiss SME works locally in the foreign market itself. Some value creation activities, such as sales, marketing or logistics, are thus transferred to the export market. Choosing the right model depends on various factors: the complexity of the product or service, the intensity of the customer relationship, the logistical effort, the customer service requirements or the expectations in the international business.

2. Create a solid Swiss foundation and focus on the customer requirements

A good market position in Switzerland alone is no indication of rapid, equivalent market success abroad; it is, however, certainly a good starting point. It is worthwhile to build up a solid base of experience, expertise and sales in Switzerland. When operating abroad, Swiss SMEs often place themselves in a niche where they are particularly strong to create a competitive advantage. In all cases, you must ask yourself: is the niche large enough and are my products or services also relevant for customers in the target market? It is imperative to focus on customer requirements. Note that foreign customers often have different requirements. A trip to the target country can help to recognize these differences and adapt your offer accordingly.

3. Check your possibilities for digitization and automation

Successful market development requires a lot of time and resources. Digitalization and automation open up new possibilities for process optimization. Check whether digital support can help your business reach more customers and deliver a better customer experience. It also helps to get inspiration from other suppliers at home and abroad.

4. Start small and in nearby markets

The choice of possible export markets is large, and one thing is certainly true: there’s no such thing as a “simple market”. When starting with internationalization, it is worthwhile for a company to focus its strengths and develop one market after another.

Furthermore, it makes sense for Swiss SMEs to target culturally related and geographically close markets. Travel to your destination country, gain experience and make contacts. Good advice and useful tips can also be obtained by exchanging information with companies that are already successfully active in the export market.

5. Do you know and understand the market mechanisms in the target market?

Things often work a little differently abroad than they do at home. You not only have to take regulatory and legal conditions into account, but cultural differences can also have a major impact on the business. This also applies to neighboring countries, since misunderstandings can occur even there. Think carefully about what mechanisms apply in your target market and how you can reach your interest groups.

6. Observe the regulatory and legal requirements

For every market entry, it is mandatory to comply with local regulations. Learn about the about necessary permits and attach importance to carefully drafting contracts. In many cases, it is worthwhile to call in a specialist service provider who is familiar with the market.

7. Choose the right pricing strategy

Sales potential abroad is often greater, but exchange rates and local purchasing power can have an impact on your competitiveness. Swiss companies therefore often choose to position themselves in the upper price segment. Although Swiss offers are well-positioned abroad, thanks to their user or quality advantages, you should carefully adjust the price to the respective market. In some cases, it makes sense to test alternative financing models or to design the offer in a modular way. Also check which parts of your offer the customer is willing to pay for.

8. Clarify financing issues as early as possible

Financing is a key obstacle for one in four companies. For this reason, it makes sense in many cases to build up a certain degree of entrepreneurial stature in the domestic market. In addition to internal sources of financing, there are often opportunities for external funding; check them out! Keep in mind, however, that export is not a short-term project and it can take several years to develop a new market.

9. Minimize the risks

Entrepreneurial activity always comes with a certain degree of risk. When planning, try to anticipate possible risks and talk to your partners (banks, insurance companies, etc.) at an early stage. Before you commit yourself to foreign business partners and investors, get support from internationally experienced lawyers and also deal with possible exit scenarios.

10. Get all relevant people on board and plan resources efficiently

Success is helped when the entire management team supports the project and manages it together. International activities always tie up a certain amount of time and financial resources, so you should plan to use them efficiently. Existing know-how, experience and networks in international business can help to accelerate market entry.

Export: opening up new markets

Contact our consultant Philip Morger today to discuss your internationalization project. At Switzerland Global Enterprise, we provide you with the first free country consultations, more detailed market and competitor analyses, help you find the right business partner, and provide assistance in administrative questions.

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