There are a number of differences between exporting and operating in Australia which will have an impact on your finances. Understanding all the costs associated with exporting will help you make an informed decision on whether your business is ready to start an export project. There are some crucial considerations to bear in mind:
Keep your financial health in check.
As your business grows, you need to make sure you work with an accountant that understands the fundamentals of your business and where you are looking to go. Your accountant will help you stay on the right track with your financials as you expand into new markets or enter into an export supply chain.
Develop a financial plan.
When you enter into exporting or start winning export-related contracts, you need to be prepared for all finance eventualities. For example, export can mean a longer cash flow cycle, a greater risk of non-payment and exposure to foreign exchange risk. Putting together a detailed financial plan, one that you can easily adjust as you collect more data and change your assumptions, can help you determine if your export plan is viable.
Understand your cashflow requirements.
One of the most common problems encountered by growing businesses is when their growth rate outstrips their capacity, which can create pressure on working capital. By developing detailed cashflow projections into the future, you can ensure you are able to plan and manage your cashflow accordingly to avoid problems.
Build a strong relationship with your banker.
Your banker is crucial in your growth journey. Successful SMEs will keep their banker informed on a regular basis, by keeping them updated on what their business plans are, what direction they are heading in and any financial issues they anticipate. If you involve your banker closely in your business, it will be much easier to get help the day that you do run into trouble or need more capital.