Exporting products or services overseas is a smart move — you’re spreading risk, reducing your dependence on the local market, and boosting your business’s growth prospects at home and abroad.
On top of that, the Federal Government’s Export Market Development Grant (EMDG) provides Australian exporters with money back on their overseas marketing expenses.
To find out what you can claim, how to maximise your return, and how businesses are adapting to the challenges of COVID-19, SmartCompany sat down for a Q&A with Export Solutions consultant Gemma Hansen.
What is the Export Market Development Grant (EMDG), and how does it work?
The EMDG is a cash rebate program to encourage more Australian businesses to export.
The incentive is that eligible businesses will receive a cash rebate based on their level of overseas marketing spend. The program is non-competitive — if you are eligible and have the right documents you will receive a grant.
The pool of funds is currently $157.9 million per annum, and most industries and services are eligible. The rebate is approximately 50% of eligible marketing expenses with the maximum grant being $150,000 (subject to available funding).
What expenses can businesses claim?
Expenses you have paid across eight categories, to the extent they were for promotion to overseas clients, buyers or seeking distributors or similar.
The eight categories of expenses are:
- Advertising and promotion (Google, Facebook, Instagram, Amazon, influencers, etc.)
- Overseas representatives
- Marketing consultants/agencies
- Free samples
- Overseas travel
- Trade fairs
- Overseas buyers
- IP & trademarks
What are the benefits of exporting products and/or services overseas for SMEs?
Taking your products international gives you a much wider target audience than just focusing domestically, as Australia has a fairly small population. A global customer base may also result in local existing clients seeing you in a new light.
Competing internationally can stimulate improvements in your products, services and operations. It gives businesses the encouragement to critically evaluate their offering. A lot of businesses say that they would not have been pushed to improve without the challenge of exporting.
Given the border shutdowns and chaos caused by COVID-19, what’s the climate like out there for Australian exporters?
It is a scary and chaotic time for Australian exporters. The uncertainty around international travel and the inability to meet with your buyers face to face is an unexpected barrier.
Business owners are resilient though. They are re-evaluating how they sell their products — looking at new avenues such as online marketing and/or engaging in-country representatives to keep continuity in the market and seek new customers.
Government agencies and industry bodies are providing more opportunities for businesses to evolve than ever before. Looking at what they can offer, along with the support from the Federal Government through EMDG, gives exporters the confidence to make changes that will get them through this time.
What new digital marketing trends have you seen emerge as a result of the COVID-19 outbreak?
Businesses are communicating through digital platforms and adapting to a new environment.
Online marketing platforms such as buyer matching and virtual trade fairs that reach your target audience are worth investigating. Keys to success include ensuring these platforms truly have engaged buyers and that they will enable you to present your products or services in a clear and powerful way.
Digital marketing platforms such as Google Ads, Facebook, Instagram, Amazon Ads, LinkedIn and Snapchat are being embraced by many companies to reach customers and drive enquiry.
The use of social media influencers has also allowed brands to stay in touch with customers and reach new audiences quickly and effectively.
Many companies are using podcasts and YouTube channels as a method to provide customers with the look and feel of their products.
How can businesses that have turned to digital tactics since COVID-19 use the EMDG?
This is where EMDG can be of huge support with a cash refund of 50% of marketing expenses up to $150,000:
- This includes paid digital marketing on platforms like Facebook, Instagram, Amazon, Snapchat, TikTok, Google, YouTube, LinkedIn, etc.
- If you’ve been using a digital marketing agency or consultant to help with your marketing activities — such as advertising, SEO, market research, etc. — you can claim their fees (up to $50,000).
- For businesses using social media influencers, the cost of sending free samples to influencers along with their fees are eligible for EMDG.
- Other digital marketing activities targeted overseas, such as webinars, virtual trade shows, paid email/SMS campaigns and more can also be claimed.
What are some tips to maximise your EMDG export grant?
- Get advice early so you know what is eligible.
- EMDG is rules based, so understand the rules and the finer points around apportionment. The scheme has evolved over 42 years so there is a lot of detail.
- Keep good records.
- With social media and online advertising, keep track of the geographic area you are targeting — this often results in a higher percentage claim.
- Engaging an overseas representative (who could be an existing team member or director) is costly, but EMDG will in effect subsidise half the costs, with a claim each year up to $200,000 of expenses.
- There are more tips and FAQs on the Export Solutions website — or give us a call.
Are there any future changes to the EMDG program?
Yes, on September 10th the Federal Government announced changes to EMDG that will apply for expenses after 1 July 2021.
EMDG will be reoriented to an upfront grant agreement which will give eligible exporters funding certainty and cash progressively to fund their marketing.
Full details of the new EMDG program are not yet available, but our team is in close contact with the Minister’s office and Austrade.
We will provide updates on our website as soon as they become known.
There are no changes to the EMDG program for 2019-20 being lodged now, and 2020-21 applications — the current program remains in place.
NOW READ: A guide to all the grants available to your small business organised by industry
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