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Business Plan to Set up a Foreign Trade Company

Every day the number of entrepreneurs to break down geographical barriers is greater. You can be one of them.

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A large part of the 161,454 exporting companies in 2017 are companies that have just been launched in international trade, with a large presence of small companies. Here you can read the keys to set up a foreign trade company and a practical assumption with real data.

The lack of experience of SMEs in the face of the complexity of the multiple facets of foreign trade is supplemented by the support of foreign trade consulting firms or expert professionals, capable of achieving the proper reception of products in the countries of destination, the fulfillment of the necessary procedures, the development of smooth and smooth negotiations with suppliers or foreign buyers. Even, sometimes, companies outsource the export / import department.

Also large companies often require specialized services of foreign trade, relating to the transport of goods, contractual relations, the establishment of a subsidiary or a commercial network abroad, etc.

Other foreign trade services frequently requested are market studies, internationalization and international marketing plans, attention to foreign clients, support in international tenders and bids, etc. Likewise, commercial intermediation is consolidated by professionals capable of opening markets in other countries.

And, of course, the international scenario is in itself a mine of opportunities to do business, through import-export activities.

TO CONSIDER

Foreign trade offers multiple opportunities and occupations: consultant, foreign trade technician, international trade agent, import-export, auxiliary activities (for example, customs agent, freight forwarder, logistics operator, etc.).

If you are thinking of setting up your company in this attractive sector, whatever the area of ​​specialization you choose, keep in mind that, in general, it is essential to have a good preparation in foreign trade techniques, knowledge of languages – especially from English -, a marked commercial attitude and a lot of availability to undertake very frequent trips.

WHO SUPPORTS YOU

The internationalization of companies is a priority objective of the Administration’s foreign policy, which enables large resources for this purpose. Therefore, professionals and companies in the sector have at their disposal a wide range of institutional services:

  • Information (about markets, countries, sectors, companies, fairs, business opportunities, trade missions, international tenders, etc.).
  • Training and advice (guides and manuals, professional skills programs, etc.).
  • Aid and financing.

At a national level, we highlight ICEX, the Secretary of State for Trade, Chambers of Commerce – especially its Cameral Plan, INE and the Regional Statistical Institutes, the Customs Department, the regional organizations that support internationalization.

Internationally, official foreign agencies in Spain – embassies, consulates and foreign chambers of commerce – must be taken into account, as well as the statistical information office of the European Union (Eurostat), the World Trade Organization (WTO), the Organization for Cooperation and Economic Development (OECD), the World Bank (WB), the United Nations Conference (UNCTAD) and the United Nations Organization (United Nations), among others.

With regard to official financial support for internationalization, the following organizations stand out: ICO, ENISA, FIEM, CARI, COFIDES, CESCE and CERSA.

THE INITIAL BALANCE

In our case, we set up a foreign trade consultancy firm that combines two types of activities: foreign trade consulting services, as well as import operations and subsequent distribution in the national market. The center from which it will carry out the consulting activities and direct the distribution operations is an office of about 70 m2 located in a commercial port area. With good judgment, the company – which has not yet defined its future volume of business – will hire a logistics company for warehousing and freight services. The main expenses are: salaries, social security, rent of the premises (or amortization of the

furniture if it is owned), supplies (water, electricity, internet …), general expenses (taxes and external services: consultants, cleaning, insurance, etc.), non-general external services (transport and storage, tariffs, etc.), commercial expenses (advertising, PR, etc.), insurance: civil liability, transport and other risks, depreciation of fixed assets, purchase of stocks (goods purchased in other countries to sell in the domestic market) and financial expenses, produced by the use of the money of others (interest on loans or bank loans, the discount of effects or for prompt payment).

SALES FORECASTS

Our consulting company expects to have two initial clients who have shown their interest in being advised in the process of internationalization of their company, strategic marketing and implementation in foreign markets. In addition, thanks to advertising, contacts and the strategic location of the office, it is estimated that each month our customer base increases in at least two others.

After carrying out our market study, we decided to establish an advisory fee of € 80 / hour for specific clients and € 60 / hour for special clients. We estimate an average time of about 20 hours dedicated to the first type of customer (about € 1,600), while we foresee continued advice for special customers, estimating that this type of customer represents 60% of the total. The first year’s income for the provision of consulting services would amount to 41,200 euros, 14% of the total.

The second activity of our company is to import goods from third countries for sale in the domestic market. During the first year, it has been agreed to import from Brazil four cocoa items with a total cost of 30,000 euros each in the months of January, October, November and December and in May a game of sportswear and swimwear by value of 40,000 euros. In addition, decorative objects will be imported from Venezuela for an amount of 15,000 euros in November. All items have all costs included except VAT, since it will be passed on to the customer (VAT on imports must be paid at customs). The tariff costs for cocoa and decorative objects are 0% and for sportswear and swimwear 9.6%.

The sale of each of the items of cocoa – already mentioned – will be made for an amount of 45,000 euros, that of sportswear and swimwear we hope to sell it for 50,000 euros and decorative objects for about 20,000 euros. For simplicity of calculation, we assume to sell during the same month in which they are purchased, with cash payments, in the case of the first operations. The total sum of income from import operations amounts to 250,000 euros, 86% of the total income of our company.

The variable costs of each import operation are set at 2,000 euros for the contracting of logistics services for the storage and transport of goods, for a total of € 12,000 per year to cover the six import operations.

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