Three steps to success for new importers and exporters

THE EXCHANGE rate is and always will be the key issue in the trade finance arena. “If you import or export it is very important to fix your costing so that you know what the price will be when you are buying or selling goods,” says S teven Matthews, of First National B ank (FNB) International Banking, who has identified three steps to success for the new exporter or importer. And it begins with business planning. “This may involve travelling to other countries to investigate the markets there, assessing similar products on offer and looking into how to market the product in that country,” he says. “From the S outh African side, there are things such as legislation and tax issues to take into account, as well as regulatory requirements, such as import and export permits.” The second step is the negotiations with the relevant foreign parties. A major part of this is establishing a price for the product in the other country – various costs relating to the export have to be taken into account. “Finally,” says Matthews, “risk management is very important. The business must assess whether the overseas counterpart has the ability to pay and should look into risk within the country itself, such as financial stability, for instance. Currency risk is also part of this research – where S outh Africa is concerned, this is a far bigger risk than in many other countries because of the volatility of our currency.”