Ask The Experts: Business outgrowing NZ
Q. I'm the owner of a small manufacturing business which has experienced steady growth in the New Zealand market since starting in 2010. I'm now thinking of exporting my product to Australian markets. What things should I consider before making the jump and is there any sort of Government assistance I should be looking at?
A. The Australian market is littered with dead or dying Kiwi companies who misjudged the jump across the ditch. First piece of advice is to not assume Australia is an easy step into a larger market, simply because its close and we both play rugby and enjoy a cold one around the barbie.
Australia is a significantly larger market than New Zealand, but is only one of many big overseas markets you could target. Make sure you're choosing Australia because there is a natural fit for your product and you have a gauge of the customer appetite and channels you will use to get into the market.
If there are other options around the world, compare them. You're looking for a market with the best bang for your buck, and it does not have to be the closest.
All foreign markets have a degree of familiarisation to grapple with when you hit the ground, and knowing that market backwards before you go is your first step. Understand the local customs, how they do business, how the regulators work, what channels are open to you and what the competitive environment is like.
Exporters can assume the most rudimentary of things and get them grievously wrong, such as underestimating the cash required to set up in a new market, assuming they can send Kiwis over to run the show, or assuming they can hire locals to do the same. All assumptions are potentially wrong.
Most importantly, understand what your value proposition to that market is. It's pretty much guaranteed to be different from home.
The best kind of assistance you'll get on a new market is the inside word from people who have been there before. There are government channels to help with this such as New Zealand Trade and Enterprise's Beachheads programme, some destination-specific trade groups and other events held with organisations like Export New Zealand.
You're just as likely to get these contacts through your own industry associations, chambers of commerce, local business networking, and even local media export stories. There are also operators in-market looking to help New Zealand companies find their feet in new territory, typically for a fee. A great example is China Skinny in Shanghai, run by a New Zealander.
Talk to NZTE and your regional export agencies about what other types of assistance they might offer, but people and knowledge are what will save you the most money and time. Through these connections, learn the common mistakes before you make them.
- Nick Churchouse is venture manager at Creative HQ, www.creativehq.co.nz