Tips for a thriving import/export business

When you ask children what they want to be when they grow up, they usually say things like a fireman, singer or teacher. They wouldn’t usually think to say something like own an import/export business. However, this can be a very challenging and rewarding path. Here are a few tips to make sure your import/export business is a thriving one.

Know your market

You have to know what your market wants. It doesn’t help to have general ideas about what you think people want though, you have to be very familiar with a specific, local market. Your aim is to supply a need, so you will need some vision in understanding the market and knowing how you can supply a need that no one else is doing. Or how to do it in a more cost-effective way.

Build a network

You can’t conduct an international transaction on your own. There are always several parties who play a role in your import or export operations. You can usually however find all you need in your region. Never stop building your network. The more reliable business partners you have, the fewer hassles you will have.

For instance, do you need to open a bank account in foreign currency or are you going to receive payments under letters of credit? Go and introduce yourself and your company to a local international banker.

Do your products need to be certified? Build a relationship with the industry association, export authority or certification company representative involved.

Need to transport your products? That would be a pretty major expense. If you are operating out of South Africa, for example, find a provider you can trust for truck finance in South Africa.

Find your niche

Find yourself a niche. What can you import or export for profit? This will take some research. Basically, the types of products you can import fall into three categories:

  • Availability: Some kinds of products could be in plentiful abundance in one region, but scarce in another. This is a potential opportunity, but first make sure there is actually a market for that product. Just because something isn’t available in a region doesn’t mean people want it.
  • Prestige: Some goods carry more weight when they are imported from a certain region, like cotton from Egypt or beer from Germany.
  • Price: Whether due to technology or resources, sometimes it is just cheaper to import something than produce it locally. China quickly comes to mind and is an interesting case study to give you an idea of the mechanics of how to make your import/export trade work.

Stay up-to-date

The thing with the import/export business is that it relies on continuously changing factors. A butterfly flapping its wings in the region you’re importing from affects the prices you can charge. Stay nimble and be ready to react to industry changes by always knowing what’s going on. Some things might seem like minute details, but can have great consequence. If you’re more interested in the big ideas than in the details of their realisation, you might be in the wrong industry.

Not getting paid for work done?

Cash flow is the life blood of a business. If you don’t have money coming in you can’t pay your bills. So when your clients or customers don’t pay their bills with you, there is a blockage in that flow. Not getting paid is one of the biggest frustrations you can face in business.

So what do you do in this scenario? There are, thankfully, a few legal recourses you can make and a few ways to prevent this situation even happening.

Run credit checks before staring work

If you do work for a customer and then invoice afterwards you are effectively extending credit to your customers. If the cost is going to be high, it would be a good idea to run a credit check on them before you start work. This will give you some indication whether the company is in financial trouble, and therefore more likely to default on payments. You can usually run credit checks online at no great expense.

Put due dates on invoices

This tip draws from behavioural psychology. When you send out an invoice, don’t just state how much the customer owes. Also give an easy to see due date. Too many business owners neglect to do this, so what could easily happen is that the receiver of the invoice does not place it in the ‘to do’ pile, but in the ‘to do later’ pile. Then it might be months before you get your money.

When people don’t pay their bills, it’s not necessarily because they aren’t able to or outright refuse to. It’s often just that they think they can get away with it or else put it off till later.

Debit order collections

If you have a client that pays a consistent amount every month, making use of a debit order collection service is very useful in reducing your monthly unpaids. A debit order collection agency takes the amount owing to you directly from your customers’ bank accounts by way of EFT payments, by their pre-arranged approval, and deposits it into yours. The process is automatic and effective. It prevents payment ‘slipping’ your customer’s minds, which is often what happens. And if your customer is in a situation where they are going to default somewhere, it is unlikely to be the payment that goes off automatically every month.

Consider debt factoring

There is a technique called ‘debt factoring’ you could look into. You sell your invoices to a third party that specialises in administration and collection of debts. They will give you your money immediately, for a percentage of the invoice, and take on the burden themselves to collect the debt from your customer.

This is convenient and hassle-free for you, but the problem with this option is firstly the issue of paying a portion to the debt factoring company, as it won’t always make economic sense. Additionally, you must think about the impression it gives your company. If it is a once-off customer that owes you a substantial amount that you’re struggling to receive, then it could be a good option. If it is a regular customer that does not normally give you trouble then you should think twice about it.

Take legal action

Taking legal action should be a last option because it is not without its disadvantages. It can be long, frustrating battle so first try other means to get your money. If you are going to take this route, you need to know your rights. Familiarise yourself with consumer law so that you keep the law on your side.

Be open to settling

If you are really struggling to receive a payment, you might have to face the fact that at some point it just makes sense to settle. Your business might be one in a long list of creditors, and you might not be at the top. You might have to settle with for less than the original invoice price, or else risk getting nothing, or having to go through a long legal battle.

It is a tough situation to be in, but it’s better to give someone a break and get some of your money, rather than push them closer to bankruptcy and get nothing.

The hallmarks of a good businessperson

Some people make terrible businesspeople. You’ve probably met someone before in the business world and wondered what they were doing there. They make bad business decisions and all their business relationships turn sour. On the other hand, you get people who seem like they were born for the business world. Deals and new ventures seemingly come easily to them, they make good investments and form strong networks around them.

Wondering which camp you fall under or how to spot someone who is a good business person? Here are the signs to look out for, which should help you distinguish a good businessperson from a bad one.

Leadership skills

A successful business person is usually a good leader as well – someone who can command a room and inspire a team of associates to perform at their best. Bear in mind that everyone has a different leadership style. Some people are quietly inspirational while others make grand speeches at the tip of a hat.

Competitive

Good businesspeople have a healthy sense of competition. It propels them to reach the top and do the best they can. It is an internal drive that sets them apart because they aren’t content to just do what they must until 5pm comes round and they can go home.

Initiative

Taking the initiative is an important part of being a businessperson. You don’t simply do what everyone else in the herd is doing. Initiative combines confidence and innovation that leads to success.

Communication skills

Never underestimate the importance of soft skills like communication. A good businessperson understands the importance of being able to communicate properly with the people around them, whether they are co-workers, associates, partners or customers.

Confidence

Being a good business person means being assured in your abilities. If you don’t have natural confidence, thankfully this is one of the attributes where you can “fake it until you make it”. When you walk into a meeting with a revolutionary idea, you need to convince people you’re right just by your confidence of its success.

Competency

While the above points are all personality traits and characteristics that are generally evident in a good businessperson, you can’t get round the fact that a good business person is simply highly competent in what they do. This could be because of heaps of experience, it could be natural talent, or it could be acquired by study. From business finance to having an eye for what ventures will work, good businesspeople know what they’re doing.

Drive

Finally, if you have the drive for business, then even if you don’t have all of the above characteristics, you will find a way to make your career in business work regardless. For this reason, having the drive to succeed might be the most important hallmark of a good businessperson.

How to be a better manager

Everyone has their story of the manager from hell. Even if you yourself are a manager, you probably have your own nightmare tale to tell from back in the day when you were working under a tyrant.

However, what if you are one of those managers?

No manager wants to think that they are one of those managers. We’re sure you’re not, but nevertheless, here are some tips on how to be better manager.

Be a leader

If you are a manager, you are in a position of leadership. What does it mean to be a leader though? It means more than giving out orders. Everyone will have a different leadership style, so you will have to think for yourself what leadership means to you. What leadership isn’t though is a dictator. Think about how you can bring the best out of your team without resorting to force and threats.

Deal with conflict directly and fairly

The workplace is a breeding ground for conflict. It is ripe for interpersonal issues, passive aggression, ego clashes and differences of opinion. The fact of the matter is that even if conflict doesn’t involve you directly, the onus is still on you to address problems quickly and fairly.

Don’t avoid conflict. Recognise that conflict needn’t be a bad thing, but in fact can be healthy. Don’t play the blame game, don’t have favourites, and confront difficult situations directly and fairly.

Get training

Too many people think that to be a good manager you just need to be skilled in your particular line of work. The thing is though that when you are promoted to management, it is more than just being given extra responsibility. You need an entirely new diverse skillset you may not have required before that. Some people are born with natural managerial skills, others need to be taught. You can get a diploma in business management if you are the latter, or even if you just want to brush up your skills.

Be reasonable

The worst types of managers aren’t the ones that push their team members or ask employees to work overtime again and again. The worst managers are the ones who are unreasonable.

There is a fine line between having high expectations and simply being unreasonable. If you fall in this category you will have to be honest with yourself. If employees come to you with reasons why something hasn’t been done, don’t just immediately dismiss it as “making excuses”. Sometimes those excuses are valid. You have to put yourself in their shoes.

Trust your team

One of the worst traits you can have as a manager is micromanagement. There’s a whole medley of reasons why this is undesirable. It saps time and resources from you that could be better leveraged elsewhere. It frustrates and demotivates your employees. And importantly, you lose out on what your team could be doing if given the chance to flourish. Rather than micro-manage your team, look at how you can create a supportive environment for them to be the best employees they can be.

They will thank you for it, your boss will thank you for it, and you will thank yourself for it.

Tips for accurate cash flow projections

It can sometimes be that your business is generating buzz, the product is selling off the buzz, the orders are coming in – but somehow you aren’t able to pay your expenses.

This can be an issue of cash flow, which is basically about how much money is coming in versus how much is going out. In other words, your inflow versus your outflow.

Cash flow management is a pillar of running a business. However, the foundation to start with is a cash flow projection. An accurate cash flow projection that is.

Base projections on actual money coming in

You cash flow is made up of the money you receive. It is not made up of the money that is owed to you. Unfortunately, the money you’re owed isn’t automatically converted into available cash you can use.

So when you make your projections, count in the money you are likely to have received at that point, not the money that is forth coming down the line as your customers pay off their credit. And remember that it’s normal for a business to have unpaids here and there, so that needs to be factored in as well.

Automate payment collection

Automating the collection of your payments, like with a debit order collection service, is helpful to make your inflow more regular and consistent. This makes it easier to gain accuracy in your cash flow projections. Debit orders are generally collected on specific dates so you’ll know when to expect money in your bank account, giving you better control of your cash flow.

Factor in the growth of your business

It’s easier to make accurate projections if your business isn’t going to grow during that period. If it is going to grow, whether naturally or on purpose, it makes it more difficult to be accurate. But it is still important.

This step is going to be a bit tougher. Besides what money you expect to make, you need to also factor in all the expenses you’re likely to incur. For instance, if you’re expanding into further territories, the transport of your products will be something to think about.  Will you outsource this, or will you have an in-house fleet of vehicles? If the latter, are you going to make use of truck finance in South Africa? How much will it be and over what period of time will the payments be? All this needs to figured out and counted in.

Update your projections

Once you have made your cash flow projection, you will have calculated as far as you can. Then the real world happens, and you see that things don’t work out like you anticipated. That is to be expected. However, if something unexpected happens that will affect your cash flow, go back and update your projections. It’s not something you draw up and just forget about.

With these few tips you will be well on your way to making cash flow projections that are accurate. A cash flow projection is very useful because it can help you see where the potential ice bergs up ahead are, but it is only as useful as it is realistic and accurate.