Setting up the Business
I. Location and Office space
Location: When starting an export-import business (EIB), you can start small and conduct business from your home. It can be a private room that is quiet and free from distractions.
You can use a mailbox till your business grows to justify a renting a separate office. This still entails the use of outside distribution or warehousing services.
As your business grows, you can rent an office space in industrial parks that have warehousing facilities and that are near major seaports, airports or railways.
What do you need to have in your office: Telephone, computer, Internet service, printer/fax/scanner. You will also need an up-to-date map of the world.
II. Business Name
Select a distinct name for your business
Once you have selected the trade name, you must register the name with the city or county unless you are doing business in your own name (for sole proprietorships and partnerships). A few states do not require any type of filing or registration.
If you establish a company, it has to be incorporated.
In order to obtain state-wide protection for your business name (for sole proprietorships and partnerships), it is advisable to register your name as a trademark (you can add some design or logo to make it distinctive).
III. Opening A Bank Account
Open an account with a bank that has a strong international department: has letters of credit facilities, conducts foreign exchange transactions etc.
Verify if the bank has modern electronic banking facilities, good credit policy.
IV. Securing Professional Services
Advisable to use professional services (accountants, attorneys) to obtain guidance on pertinent accounting/legal matters such product or tax liability, or business contracts.
There are free seminars conducted by the US and foreign commercial service, the Small Business Administration and its small business development centers (SBDC), the US department of commerce.
V. Establishing Your Role
You can establish your role in the export (or import) business by examining your interest and capabilities. You can start your export business by using an agent or distributor. If you are a manufacturer, you can also use export management companies. (see the section on trade intermediaries). In the case imports, you can act as an import agent selling your merchandise to wholesalers or distributors. You can also be a retailer selling the merchandise to consumers.
There are different implications of your role. If you hire an agent overseas, they cannot take title to the goods. Title remains with you. In the case of using foreign distributors, title is transferred to the distributor.
VI. Determining Capital Requirements
Internal financing—Using one’s own resources such as savings accounts, money in stocks, bonds and mutual funds.
External sources: Family and friends, banks and other commercial lenders (with some collateral), lines of credit (with collateral), personal and commercial loans, credit cards. The US Small Business Administration has certain financing schemes for new and existing export businesses (not imports).