Your First Ninety Days as an Exporter: A Finance Setup Plan

A new exporter can be ready for a first shipment in about three months if the work is done in the right order: registrations and banking first, then pricing and payment terms, then the first order and its finance, and finally the shipment and collection. This plan breaks the first ninety days into three phases and shows what to do in each, in plain terms. Exact timelines depend on your product, your bank and the authorities, so treat the phases as a guide.

Before day one: decide what you are really exporting

Many first-time exporters begin with a buyer enquiry and work backwards. It is safer to begin with a few honest questions. Which product and which markets? Does the product need any approvals, tests or certificates to enter those markets? Can you produce the quantity and quality consistently? How much cash will one order tie up before payment arrives?

Write down the answers. They determine how much finance you need, what documents you will handle and which risks are yours. A short note now saves rework later.

Phase one, the first few weeks: foundations

This phase is about being a recognised, bankable exporter. The common building blocks are:

• A business registration and tax setup that is current, including GST
• An exporter code from the relevant trade authority
• A current account with a bank authorised to handle foreign exchange
• Registrations or licences specific to your product, if any
• A basic understanding of the export documents you will have to produce

Speak to your bank at this stage rather than waiting for an order. Ask what it expects from a new exporter, how its export credit process works, what it charges for foreign exchange services and which documents it needs. Procedures and forms change, so confirm the current requirements with the bank and the authorities.

Phase one continued: understand your costs and cash

While registrations are in process, build a simple cost and cash model. List the cost of producing the goods, packing, local transport, port and handling charges, freight, insurance, documentation and bank charges. Then map when each cost has to be paid against when the buyer will pay.

The gap between those two timelines is your working capital need for an export order. It is usually larger than for a domestic sale, because production, shipping and collection all take longer. Knowing this number early lets you approach lenders with a realistic request.

Phase two, the middle weeks: pricing, terms and buyers

With the basics in place, turn to commercial terms. Three decisions matter most.

First, price. Quote on a clear basis that states who pays for freight, insurance and port costs at each stage, so there are no disputes later. Add a margin for currency movement and for costs you may have missed.

Second, payment terms. The usual choices differ mainly in who carries the risk.

Third, buyer checks. For a new buyer, ask for references, check the company's standing through credible sources and consider a credit report or export credit insurance. A new exporter should be cautious about open account terms with an unknown buyer.

Insurance and logistics partners

Goods can be lost or damaged between your gate and the buyer's warehouse. Ask how cover works for the route and mode you plan to use, and confirm who bears the risk at each stage under the price basis you quoted. Banks often expect goods they finance to be insured, so arrange it before shipment, not after.

Choose freight and clearing partners the same way you choose a bank: by reliability and communication. A forwarder who misses a cut-off date can cost more than any saving on rates.

Currency: decide before you quote

Quoting in a foreign currency means your rupee receipt can rise or fall before payment. Decide how much of that risk you can bear. Options include pricing in a way that shares risk with the buyer, using a forward contract to fix a rate for a future date, or matching foreign currency costs against foreign currency receipts. Ask your bank how each works and what it costs.

Phase three, the final weeks: the first order and its finance

When an order arrives, check it carefully. Confirm quantity, specifications, delivery date, payment terms and documents the buyer expects. If a letter of credit is used, read every condition and ask for amendments before you start production, not after.

Then arrange finance. Pre-shipment credit, often called packing credit, can fund production and packing against a confirmed order. Your bank will look at the order, your standing as an exporter, the buyer and your ability to ship in time. Provide a cost sheet that shows how the funds will be used.

Shipment and getting paid

Plan the shipment backward from the delivery date, allowing time for production, inspection, customs formalities, transport and documents. Prepare the commercial documents accurately, since small errors in names, quantities or descriptions can lead to delays or refusals, especially under letters of credit.

After shipping, submit the documents to your bank within the time allowed. The bank will send them to the buyer's side for collection or payment, and you may be able to get finance against the documents while you wait. Track the due date and follow up. Export proceeds normally have to be realised within a permitted period, so keep an eye on it and check current rules with your bank.

A simple ninety day rhythm

1. First few weeks: registrations, bank setup, product approvals, cost model.
2. Middle weeks: pricing basis, payment terms, buyer checks, currency decision.
3. Final weeks: order review, pre-shipment finance, production, shipment, documents.
4. Afterwards: collection, reconciliation of proceeds, and a review of what to improve.

Where to go from here

If you would like a second pair of eyes on your export setup and finance plan, Lalsar Trade & Logistics can review your case. No advisor can guarantee outcomes, so confirm current terms directly with your bank and the authorities.