Building business resilience through diversification
Adapting to change, making product pivots and entering new markets can help build business resilience.
Diversifying your business might be branching out into new sales channels or launching different products. For others, it’s entering international markets or expanding into unfamiliar industries.
The loan [from Export Finance Australia] not only helped us to fund the purchase and manufacture the product for the big contract we’d won, but it also allowed us to conduct a major pivot to the home fitness market.
David Sigler
Chief Commercial Officer and General Counsel, Y Bell Group
The ability to adapt, pivot and recover quickly from new challenges arising is important for any business.
Adapting to a changing market
Adapting products or pivoting sales channels in line with the needs and demands of customers are popular ways that businesses choose to diversify. This enables access to a new, and often larger, cohort of customers, resulting in increased sales.
Supporting Australian businesses to adapt
Y Bell Group (Trading as YBell Fitness) was achieving success both locally and internationally with its patented 4-in-1 fitness tool, the YBell.
When markets were disrupted worldwide, the business was quick to adapt, launching its US e-commerce site to target the home fitness market.
While a changed operating landscape was the impetus for YBell Fitness to change its strategy and fast track a move to online sales, the results will facilitate ongoing business continuity.
We supported YBell Fitness with a loan to help it fulfil a contract with US gyms. This also freed up enough cash flow to help the business adapt to meet the pandemic’s changing marketing conditions.
Pivoting to seize new opportunities
Another way exporters are demonstrating resilience in the face of adversity is by embracing the business pivot. This might be by offering new products in response to a fresh opportunity or branching out into different business territories.
The right partner to facilitate change
When Active Apparel Group’s factories in China had to shut down temporarily due to COVID-19 and orders slowed, the team found itself exploring new products.
Upon reopening initially, management hired extra staff to fulfil backorders. However, it wasn’t long until they ran out of work – US customers couldn’t open their stores due to restrictions, so had reduced their orders significantly.
Active Apparel Group found itself with extra capacity, which is when it identified a pivot opportunity to manufacture and export non-medical grade reusable face masks to the US. There was an immediate need for the product, and the opportunity would enable the business to diversify its revenue stream, while also increasing its customer base.
We provided Active Apparelt Group with an Export Line of Credit facility. Through diversifying its products with the support from us, Active Apparel Group was able to continue its business operations.
Diversifying internationally: key considerations
There’s plenty to consider before growing a business internationally, including the nuances of the market, customers, competition, supply chains and regulatory requirements.
To ensure success, building strong relationships with representatives in target regions, while being conscious of the new operating environment is important. For more information on exporting, download our ‘Entering a new market’ eBook.
Cash flow is another important consideration. Businesses often require money to take a venture beyond Australian borders, and that’s where Export Finance Australia could support.
From working capital to build an e-commerce site or fund the development of a new product, to performance bonds to secure new contracts in new markets, we offer financial solutions to help businesses take on the world.
To discuss your export financing needs and the options available, please get in touch at 1800 093 724 or explore more of our resources for support on your export journey.
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