Today’s modern era has changed the way of doing business in the world to a great extent. Every entrepreneur wants his export business to reach the country and abroad. However, it depends on the spirit of the entrepreneur. Focus and positive thinking are very important to be a successful entrepreneur.
There should also be a quality to gain a competitive advantage. The demand of the present time is that not only the entrepreneur sacrifices himself but also makes his business strong, only then he can stay in the market.
Today we are going to inform you how to start the export. Export is a very broad concept in itself. An entrepreneur has to make many preparations as an exporter before starting an export business. Depending on the product to be exported, certain licenses and permissions are required. To start an export business, the following steps are followed.
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1- Setting up an organization
To start the export business one has to establish a sole proprietorship firm/partnership firm/company with an attractive name and logo as per the procedure.
2- Opening of bank account
A current account is opened with the bank authorized to deal in foreign currency. So that your business transactions can be done easily.
3- Obtaining Permanent Account Number (PAN)
Every exporter and importer is required to get PAN from Income Tax Department. (Click here to apply for PAN)
4- Obtaining importer-exporter code (IEC) number
According to the foreign trade policy, it is very important to get IEC code for export/import from India. No product can be exported without it. The importer-exporter code can be applied online at www.dgft.gov.in. (Click here for more information in this regard)
5- Registration cum Membership Certificate (RCMC)
To avail of the authorization for import/export, any other benefit or concession under Foreign Trade Policy 2015-20, as well as to avail services/guidance, exporters may be provided with the relevant Export Promotion Councils / FIEO / Commodity Boards / Authorities. It is necessary to get RCMC given by.
6- Product Selection
All can be exported freely, except the products which are prohibited and banned by the government. Entrepreneurs can study the export trends of various products from India and select the right product for export.
7- Select markets
Markets around the world are different from each other. It is prudent to choose the foreign market only after taking into account the size of the market, competition, quality requirements, payment terms etc. Whereas under the Foreign Trade Policy, exporters can also evaluate the market based on the export benefits available to some countries. Export promotion agencies, Indian missions abroad, colleagues, friends, and relatives will prove to be your main sources in gathering information.
8- Finding buyer
Entrepreneurs can resort to trade fairs, buyer-seller conferences, exhibitions, B2B portals, web browsing to find the right buyer for their product. This is the most simple and effective way to find buyers. At the same time, the Export Promotion Council, Indian Mission abroad, foreign chambers of commerce can also be helpful. Creating a multilingual website with a product list, price, payment terms, and other related information will also benefit your business.
Delivering customized samples according to the demands of foreign buyers helps in getting export orders. According to the Foreign Trade Policy 2015-2020, the export of bona fide trade and technical samples of freely exportable goods will be permitted without any limitation.
10- Price / Cost Determination
There is no less competition in the international market as well. In such a situation, the price of the product can play a big role to attract the attention of the buyers of the product and to boost the sales. Pricing should be based on the terms of sale, from the sample of export income to board (FOB), cost, insurance, and freight (CIF), cost and freight (C&F) expenses. The goal of determining export cost should be to sell the maximum amount of goods at a competitive price with a maximum profit margin. It is advisable to prepare an export cost sheet for each export product.
11- Negotiate with buyers
After the buyer’s interest in the product, future prospects, and continuity in business, a demand for a reasonable allowance/price discount should be considered.
12- Covering of risk through Export Credit Guarantee Corporation
This step is very important for every entrepreneur thinking of becoming an exporter. Actually, there are many risks in international trade. For example, due to the bankruptcy of the buyer or that country, the payment can get stuck. These risks can be covered by a proper policy of Export Credit Guarantee Corporation Limited. Where the buyer is placing an order without paying in advance or with an initial letter of credit, it is advisable to purchase a credit limit on the foreign buyer from the ECGC to avoid the risk of non-payment. (Click here for detailed information about this)