Businesses often start and then rapidly stop exporting, mainly because they have not given proper consideration as to whether they are ready for it.
So, here are just a few of the initial questions to ask yourself when considering whether you are ready to export?
- Are you aware of demand for your products outside the home market?
- Are you aware of the processes and technicalities required, and therefore the resources to enter and support new overseas markets?
- Are you aware of any product modifications, testing or certification that may be required for your product(s)?
- Are you aware of how to connect with new customers overseas?
There are numerous UK institutions where general international trade development advice can be sought. These include:
- UKTI – helps UK based businesses develop their international business
- Bilateral Business Councils – promote trade between the UK and regions that may be difficult for UK exports to do so alone
- Trade Associations – sector specific advice on international trade
For more specific advice:
- British Chamber of Commerce
- Intellectual Property Office
- UK Export Finance
- HMRC
- Banks
- Institute of Export
Any export plan needs to be a working document within your business that you can add and update in order to keep it both relevant and useful, just as you would a business plan. It’s so easy to see formal planning as a tick-box exercise, but regular reviews of where you are against your plan will only highlight variations, and allow you to focus your thoughts more clearly on the next step.
- For whatever action you plan to do, specify when you will do it, and stick to it
- Conduct a SWOT analysis (strengths, weaknesses, opportunities and threats) of your business in terms of its current position
- Even at this early stage, it is helpful to rank the suitability of each of your products for export, but keep an open mind until you understand the best market match
- Draw up a shortlist of the markets you consider to be a best fit for your products.
- Look at the markets showing which have most interest in your products.
Whatever stage of development your current online exposure is within a market, use Google Analytics, or the analysis tools of the alternative market dominant search engine, to assess current interest and. Other tools you can use within the Google suite to cross reference Analytics and to source further information include Market Finder, Trends, as well as Keyword Planner. Be careful though, if your online precence is not properly search engine optimised, analysis may indicate low interest, when in reality this is not the case.
- Look at any current links you have or have had with markets. Starting with some knowledge can be easier, but don’t chose the easy option when research is showing a significantly greater opportunity elsewhere in perhaps more difficult markets to enter, unless you are doing so for testing reasons
- Assess trends within the sector and what your current competitors are doing
- Carry out a skills assessment within your existing team, assessing their realistic current spare capacity, if any
- Reaching new international customers raises new challenges. Look at how you are reaching current customers and consider how this needs to change for each international market you wish to enter.
- Pricing and getting paid need careful consideration. Look at the cost-plus pricing model alongside what the market might stand and whether there is any pricing elasticity within the market. When pricing consider the working capital element, given how long international trade takes compared to home trade. Work out the different stages in the process from delivery to expected terms of payment, giving a total expected period through which you will need to provide working capital.
- Delivery and documentation is exceptionally important to get right. Consider the modes of transport as well as the paperwork you will be required to complete. Will you do this yourself, in which case is the time and skills available, or will extra resources or training be required. This all takes time. Or, will you use outside specialists?
- Different rules and regulations apply is some markets, such as revised product certification, which have an impact upon documentation. One slip-up an your products will not be going anywhere.
- Be careful not to take markets for granted. Canada, a country we might feel very comfortable communicating with, uses both French and English in different regions. The USA is so vast that states can vary quite significantly, so many selling to such markets will split it up into five regional markets.
- There is nothing quite like investing the time and the money in physically visiting a new market. The best place to start would be a sector trade show where there is a condensed collective of buyers, sellers and interested parties.
This base information will help you to develop an action plan to enter new international markets. At the very least, it will tell you what you don’t know and therefore what you need to find out. You might be surprised just how solid your understanding is, and therefore it is just a case of following a process to enter a market, instead of being overwhelmed by the thought.