Whilst nobody would disagree that it has been extraordinary tough for business and in particular SME’s since 2008, the fact remains that the insane optimism of entrepreneurs has shone through the financial mire and many thousands of new ventures have been started and many flourished.
Those entrepreneurs who take the plunge into new ventures are an inspiration for everybody and should be acknowledged as such. Equally those businesses that have survived the horrors of the last six years offer us stark lessons about how resilience, perseverance and sheer hard work can achieve remarkable things. But what are it that makes one idea or business prosper and another fail? There are clearly countless reasons but one of the keys factors in my opinion is ensuring that the venture fits within the economic backdrop that exists at the time; don’t fight the times but work with what is in demand and what resources are available.
Without corporate trade finance, there wouldn’t be Indian spices, clothes, or jewellery in the United States. In fact, according to Investopedia, the World Trade Organization (WTO) estimates that international world trade has expanded 80%-90% thanks to trade finance.
For this to continue, companies need to include trade finance in their business development strategies.
How do you do that? Learn how you can incorporate trade finance into your business development strategy.
Incorporate Inland Trade Finance in Market Penetration and Market Development
Market penetration and market development are key parts of a business development strategy. Market development involves selling more of your service or product to repeat customers.
While market penetration is about expanding your product or service to other cities and provinces, it can involve inland trade finance. For instance, let’s say you sell jewellery. A business from a neighboring city may purchase your jewellery and sell it to its customers.
You have a long history with this client. And know that your product is selling quickly in your customers’ shop. In which case, you could propose selling the client more jewellery for a bulk price.
After negotiating, the client agrees. However, despite the long, positive history you’ve had with the client, the client may not feel comfortable paying you before you export the jewellery.
This is where a trade financier or banking institution comes in, providing a letter of credit promising that you will export the jewellery upon payment. Mr Dimitri Rusca can give you expert suggestion on this.
Consider the Internet and Brick-and-Mortar Stores
If you’re already selling more of your product or service to clients, perhaps it’s time to branch out to another channel such as the Internet?
If you run a successful e-commerce store, maybe it’s time to start a brick-and-mortar store as well?
Especially when it comes to brick-and-mortar stores, trade finance can help you secure new import and export trade deals-especially when there are multiple currencies involved.
Creating a New Product or Service for Repeat and New Customers
With repeat customers, you’re doubling the number of products the repeat client is importing.
And, with new clients, your new product or service will expand your client base. It’s important that you first create new products for your repeat customers before jumping to new customers, as it involves more risk.
Again, trade finance can help cultivate more trust during this period of growth. Since trade financiers or banking institutions can create letters of credit, laying out the terms the importer and exporters must follow.
Final Thoughts about Your Business Development Strategy
Know that growth doesn’t happen in a day; it’s harder for businesses to jump from market penetration to supplying new products to new clients.