Starting an import-export business is a lucrative opportunity for entrepreneurs who are looking to expand into the global market. This allows companies to reach and cater to global audiences and connect with suppliers and buyers worldwide.
Why should you start an import-export business?
With the growth of eCommerce, the export-import business has become a thriving field for the exchange of goods and services across global borders for all company sizes. One of the significant advantages of starting an import-export business is the access to the international market. This, in turn, increases profitability and gives exponential growth. However, certain drawbacks, like over-saturation and high competition, must be considered when starting an import-export business.
This step-by-step guide will help you understand everything you need to start an import-export business, from choosing the right market to targeting the right customers and buyers to shipping your first order.
How to Start an Import-Export Business?
Here are eight steps that companies must take into consideration when starting an import-export business.
PAN Card
To register your business, you should have a PAN card issued by the income tax department. You and other parties involved in the company’s decision-making should have a valid identity and address proof to get your business registered. Getting a PAN card for your business is similar to a personal PAN.
Business Entity
Your business or company, whether sole proprietorship, partnership or Pvt Ltd., must be registered with the Ministry of Corporate Affairs and the Government of India.
Bank Account
You must have a current account issued by a bank for business entities. This account will be the mode of transacting with customers, suppliers, and vendors. The documents required to open a current account can differ depending on the type of bank and the business entity. Read the documents and terms very clearly before opening an account.
Have an IEC
The import-export code(IEC) is mandatory to start an import-export business. It is issued by the DGFT (Government of India). You will require above three documents to file for the IEC.
Obtain a RCMC
Having a Registration-cum-Menmbership-Certifcate (RCMC) is essential to access the benefits under India’s foreign trade policy. RCMC takes about a week or 2 for registration and is valid across India. The procedure to obtain an RCMC varies depending on your business entity.
Choosing the right product and export market
Ensuring that your export product and market are aligned is the key to a successful import-export business. You must consider factors like the demand for products or services in the global market, rules and regulations, export trends, political and social differences, trade barriers, and many more to find the right product and analyze the viability of choosing the export market.
Attracting Buyers
Once you have figured out the right products and market, your next goal is to attract buyers and potential partners. You can attract leads for your product and service through your website, social media, trade fairs and exhibitions, and even buyer-seller platforms and government bodies. It is important to have a GTM strategy in place to attract the right customers.
Have your finance sorted
Now that you have assembled an import-export business, it is essential to have your finances right. You must have an export financing plan best suited for your business.
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