Startup entrepreneurs have a long and challenging road to navigate. Understanding market demand and customer expectations, setting up operations, and following compliance guidelines are hard enough. But money constraints make the journey tougher. Expect the challenges to be even more daunting if you foray into the import domain as an entrepreneur. Importing goods can open opportunities to diversify, add value to your current offering, and grow your business. But it comes with risks, despite being an attractive proposition for startups. Here is some actionable advice to overcome import risks and make the most out of the decision.
Get the basics right
Importing is a complex task, and it requires extensive planning. You need to go the extra mile with planning as a newbie. Getting your basics right should be a priority. You can do it by writing down clear objectives with timelines, budget, cost estimates, and KPIs. Create a roadmap by defining the markets you want to buy from currently and in the future. A well-rounded plan and roadmap are enough to turn your idea into a viable strategy and action plan.
Seek advice from a finance broker
Startups often run on shoestring budgets, and import runs on big money. You may have a hard time getting access to business funding for getting into the domain. Collaborating with a finance broker is a great idea as they can save time and get funds for you on the fly. These professionals understand the commercial finance sector and unique business needs. You need not worry about falling short of funds when you require them for an upcoming consignment. The best part is that you get immense value without spending a fortune on their fees.
Go through the rules on duties and taxes
Duties and taxes are inherent elements of import, and they can be painful for an entrepreneur exploring the domain for the first time. But you must comply with duty and tax regulations to stay on the right side of the law. Going through the rules before diving in is the best way to start. It gets you in a better place to plan your expenses and budget. The good thing is that you can claim a duty drawback on imports, provided you are aware enough. As a newbie, you can consider collaborating with a customs broker to handle these aspects.
Do your due diligence on suppliers
Setting up your import startup is also about building reliable supplier relationships for the long haul. The best way to do it is by researching the market and your potential suppliers to ensure they are trustworthy enough. Do your due diligence by digging deep into supplier information such as business registrations, standard trade accreditations, and public documents. It may take some effort, but you will be in a good place to understand your suppliers’ credibility and curb the risks of non-shipment.
Understand and negotiate the payment terms
Successful trade transactions boil down to correct payment terms, so understanding them is crucial for startup entrepreneurs. You must also learn to negotiate payment terms to get the best deals to elevate your bottom line. Determine the timelines for paying the supplier for the goods, whether you should do it before shipment, after shipment, or on receiving the delivery. You may also decide on the partial payment terms with milestones to work out an arrangement that benefits both parties.
Watch out for import risks
Import is risky, even more, when you are a beginner. But the fear of risks should not keep you from reaching out for success. You need to understand them in the first place and plan to cover them. The most common import risks include the following areas-
- Products- warranties, negligence, physical damage, and extreme weather
- Manufacturing- design defects, production errors, and delivery issues
- Currency- payment terms and forex volatility
- Transport- damages and loss of products
- Regulatory- changes in trade regulations, taxes, and duties
Being aware and planning for these risks can reduce them and save your startup from impending losses.
Sort out the shipping
Shipping is one of the most arduous parts of setting up an import business. But everything boils down to choosing the right shipping partner for your venture. Seeking advice from freight forwarders can help you ease the import transactions and ensure the safety of your products as they cross international borders. Besides choosing the right partner, you must also stay ahead of the paperwork to prevent legal issues during the transactions.
Import businesses can win on all fronts by staying ahead of the rules and regulations. But it requires careful planning and immense patience. Most importantly, you must collaborate with reliable partners to streamline the journey.