Issue Number 28
August 2016

Exporting is good for business

According to the latest The Voice of Australian Business survey conducted by Bentleys, only 19% of SMEs operate outside Australia or New Zealand. Why is this? Does it mean exporting is “mission impossible” for SMEs? Or is it because exporting is only for large companies?

“Why would I want to operate outside Australia when I can sell my products and services in Australia?”

The answer is that exporting helps companies grow, increase sales and profitability. According to Austrade, companies that export are more profitable than those who do not export and are more likely to stay in business.

The total population in Australia was estimated at 24 million people in 2016. As of March 2016, the world population was estimated at 7.4 billion. Australia has 0.3% of the world share. Our market share is insignificant compare to other countries like China (18.6% of world population), India (17.9% of world population) and the United States (4.4% of world population).

Putting this another way, 99.7% of the world’s consumers live outside Australia, so if Australian businesses are only selling domestically, it is reaching just a very small share of customers. There are several large markets oversea which utilize many high-volume purchases. Exporting is a new income stream to Australian businesses.

Doing business overseas allows you to grow your business by tapping into new oversea markets. As a result exporting allows your business to spread your risks across different markets. If the domestic economy begins to falter, you may still have other growing markets for your products and services.

International trade is not always easy, as it requires understanding of overseas regulations, logistics, ownership and foreign currency which impact on the amount paid. McLean Delmo Bentleys has a strong connection with China. China is the world’s second largest economy after the U.S. and the biggest trading partner for most Asian economies including Australia. Through our own office in China, we provide support to Australian businesses with intention to export to China. Please talk to us if you would like to explore the business opportunity in China but unsure of where to begin.

More than 350,000 companies in U.S. exported goods and 98% of those are SMEs with less than 500 employees. Who said exporting is only for large companies?

Alan Ling

Important: This is not advice. Clients should not act solely on the basis of the material contained in this newsletter. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly.

We therefore recommend that our formal advice be sought before acting in any of the areas. This document is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.

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