With a sense of diplomacy, the export and import business could be the right one for you. Also with an air of professionalism and a diplomatic attitude, you can pretty easily succeed in this business. All you need is will and the determination to get the necessary steps done the right way.
As you grow in your business, many things become apparent and straightforward to deal with. For instance, you'll need to find someone to manage shipments, referred to as freight forwarders. You'll also need to establish solid connections, dependable and strong relationships with suppliers while running your export import business. In a relatively short period, you'll be on your way to earning an impressive income with very little overhead costs.
Now, let's understand the steps involved in how to start import export business in India.
Did You Know?
According to Kearney's global services location index, India is the world's #1 place to start any business. India's foreign exchange reserves are worth $200 billion. India is dominating the world in many export businesses. For example, India exports around ₹4,54,15,68,00,000.00 worth of garments.
How to Start an Import Export Business?
Selecting the Best Export Market
You must ensure that the product/service you export lands in the appropriate market. There are a few factors that a new exporter must be aware of. These are:
- Demand for the product
- Trade Barriers
- Political environment.
Based on these variables, the exporter must analyse the market's viability and choose the best market for their products.
You Should Apply for a Business Pan Card
There are certain requirements for starting a new export and import business with a Business PAN card. Your partner must possess identity proof and proof of address for registration of your company. Each registered company must obtain a business PAN Card from the Income Tax Department. The process to obtain a PAN for the business entity is similar to getting a PAN for yourself.
Choose the Type of Business Entity You Plan to Establish
To start an export and import business, you first need to choose the structure in which your company will operate under. After that, you must register your business and select a name to represent your company. The company structures under which you can register your business are as follows:
- Sole Proprietorship
- Limited Liability Company (LLP)
- Partnership firm
- Public Limited Company
- Private Limited Company
Create a Current Account for Your Business
A bank account used by businesses is known as a current account. Your business will require a current account from a banking institution to conduct business with vendors and customers. The documentation necessary to create a current account differs according to the kind of business organisation you are establishing.
Don't Forget to Mention the IEC Code
The IEC code is mandatory for anyone who wants to establish an import export company. Numerous supporting documents will accompany an IEC code application form which you must submit to the director general of foreign trade.
Select the Right Product You Want to Export
The right product selection is crucial in your export import business strategy. You should keep in mind many factors like the current state of international markets and regulations, trends in exports, etc. Ensure not to settle on any product too early. Deeply analyse the competition , possible demand and profit margin before deciding a product to export.
Register the Details of Your Import Export Business in India
Before starting a business in India, you have to register your company. You must register as a Limited Liability Company (LLC) or a one person company. Therefore, every business's formation will depend on the needs of the industry. Each type of business has its characteristics, and you can incorporate your company according to your requirements.
- Solo Firm Registration: The basic principle behind the solo firm registration is the best option for you when you wish to test your ideas within the import or export industry. Another advantage is that you're solely responsible for the business and have control over it.
- Private Limited Company: It is among India's most popular business structures. Largest importers and exporters select this type of business structure.
- Partnership Firm: It is similar to a sole proprietorship. However, it does require at least two partners instead of one.
- LLP: The LLP registration is a superb method to run your business if you have partners and your budget is limited, but you want to enjoy the benefits of a company. In the LLP business structure, the most important thing you need to note is that it has limited liability.
Finding Buyers for Your Product
After deciding on the product and market, the next step in your business plan is to work out how to identify buyers for your export products. There are a variety of ways in which you can generate potential buyers for your products, such as developing a website, registering on buyer-seller websites, taking part at trade fairs and exhibitions and so on.
Don't Forget About Getting Your Finances in Order
No matter how well you design your export business plan and the number of contingencies you plan for, your company will not start without having access to some initial funding.
The first step is to establish your financial projections correctly. It is crucial to begin by estimating the financial needs of your company. After that, you need to determine what financing for exports will be the best fit for your particular export venture. It can be in the form of both short-term and long-term finance according to the requirements of your business. In addition, there are subsidy programs from the government that you can access.
Once you've finished these steps, your new export business is ready to begin its operational tasks. These may include:
- Finalising the freight customs
- Getting a forwarder shipping partner
- Getting a clearing agent for your business
- Exploring new market opportunities
- Promoting your new business in foreign markets.
The import export business isn't an option for all. However, it's an operation you can manage yourself, and you don't need to answer to anyone. The rewards of conducting business with a foreign nation is exciting and most importantly, there is a huge profit potential.
You've got everything perfect in your business if you make the right contacts and follow up with trustworthy manufacturing companies, dependable shipping companies and responsible distributors. Besides that, avoid conflicting with calculations much to save time.
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