How to grow your small business for exportNo Case Matched!
By Temitope Ojo
It’s a small business world, and statistics have it that the number of women business owners increased by 18% in 2017.
Today, 26% of business owners are women, and they tend to be younger than male business owners with 51% of women business owners under the age of 50 compared to 44% of male business owners.
This data comes from a survey conducted by Guidant Financial of 2,600 small business owners and hopeful business owners. Among the respondents, women accounted for 24% of aspiring business owners.
It is not good enough to just own a business, it is important for women-owned businesses and firms to be able to export their products.
Studies have found that women-owned firms that export, not only earn more, but also, employ more people and are, on average, more productive than women-owned firms that do not.
Clearly, exporting has very real advantages. From health/beauty/fitness, general retail, business services, food/restaurant, and cleaning and maintenance services, opportunities abound for export.
Quincy Sumbo Ayodele, founder of Quincy Herbals, a natural weight loss and skincare Nigerian company, after years of practice, discovered that the concept of using herbal medicine and natural skincare is a highly lucrative business in countries like the USA and Canada, where obesity is quite high. So, the goal was eventually to export to foreign markets.
She then launched her products in the USA in 2015.
Today, not only does she has her daughter as the Managing Director of the company, her products currently sell on Amazons Global Marketplace in the United States, Canada, Mexico, and United Kingdom.
So, how did she achieve this and how does a woman grow her business for export?
Ayodele gives insight into ‘know before you go’ tips for exporting, which includes knowing your business, the market, your assets/operational cost, your partners, and the rules.
According her, to get a product to become export ready, there are a few considerations to think of. Is the product something that is needed in the country or countries you plan to export your product to? Knowing the market involves finding the right product, studying the market you intend to go into and it’s in demand. She revealed that Quincy Herbals had to isolate a few products out of the many products available to Nigerians to those they felt were more accepted in the United States.
And because Nigerians have had a reputation for cutting corners over the years, she knew she had to work more on quality control for acceptablity.
According to Mrs Ayodele, “Your product must be created in accordance with the international standards required of the country you are planning to export to: “The international standards vary from country to country; so, you have to check with the food and drug administration of the respective countries you wish to export your product to. If you plan to export to more than one country, go by using the highest standards.” She added.
Ayodele identified the topmost challenge for women business owners as lack of capital or cash flow. And setting up any exporting company can be capital intensive. ‘You must be ready to fund and sustain the business” she said.
She noted that stores simply won’t take a new product and pay for it upfront. So once you have spent money on the factory, you need to make sure that you budget in your working capital. “You can’t spend all your money on the factory setup and production, and not have working capital if you must avoid failure”.
“I think a lot of small businesses fall into that trap. They don’t budget for working capital and then, you get stuck and basically their investment dies because, they don’t have money to sustain it – especially if they have put in everything they have or used a loan.
“You have to put into consideration the way the product will be produced and how much it will cost to produce it. It has to be a product whose ingredients are readily available and relatively affordable. The lesser ingredients you have to import, the more competitive your product becomes in terms of the international market.
“Take for instance one of our bestselling product; it is made up mostly of shea butter which is entirely processed in Nigeria. This drives costs down because the major ingredient namely shea butter, doesn’t have to be imported from overseas.”
Another important factor to consider is licensing, registration and certification. This is very important, in order to get your product easily accepted in the intending country of export.
Again, Mrs Ayodele says: “one has to make sure you get the required licenses and certifications needed both to get the product out of Nigeria, and into the receiving country. This includes your companies CAC documents, NAFDAC, export license, lab analyses of the product by a certified company in the receiving country, and relevant licenses and certifications as required by the receiving country.
“You may need additional certification if your product is food or cosmetic. In the United States, you will also need to register your company officially for taxation and verification purposes. Keep in mind if you are exporting a cash crop or commodity that comes in its raw state or better still is not a finished product, (something like cocoa, yams, fruit, cashew nuts, grains etc), the requirements are not as stringent.”
Ayodele also spoke on the need for attractive packaging and proper marketing. According to her, this portion of product development is equally important.
“Packaging has to be attractive, affordable, easy to find and acceptable by the receiving country. If you are dealing in skincare products like ours, it must be housed in an easy to open container, preferably produced locally, but must be in accordance with international standards.
“Labels can also be designed and printed locally bearing in mind international labeling standards. All ingredients must be clearly stated on the label, including the expiration date, international address and contact number of your company.
There also has to be a barcode with the products identification number. Just like you register for a product barcode in Nigeria, you also have to register for a barcode in the international market. The barcode must also be put on the label or on the product.”
Marketing your product is essential. And with technology, being internet savvy, will be an advantage. “You must do your research on internet. You also need to have a website and be on social media platforms. If possible ensure your website is optimised for e-commerce, so that people can purchase or order your products directly from your website. You have to have a warehouse or place that can house your products whenever an order is made.”
Another important factor to consider is to identify industry players and partners.
There are professionals already in any business you intend to take outside the country. Industry players can advise. Identify and contact them. Ask questions on how to go about it.
Mrs. Ayodele has these final words of advice for entrepreneurs willing to go into export.
“For your products to be accepted in the international market, don’t be in a hurry. It is better to take your time to position your product for international success, than to rush and produce a substandard product that will be rejected by the receiving country, or not even allowed to leave Nigeria in the first place.
“Note that as a small business, you can never get your product perfect from the beginning. You have to adjust as you go.
You also have to make contingency plans, especially when you are trying anything new. You have to prepare for the worst, because for some reason, it is always at those times that things go wrong.” She concluded.