By Chris Searson, Chair of Smart Cookie
The best piece of advice I can give anyone who wants to break into the export market is don’t be too hard on yourself. Start with the easy steps and once you have some experience of exporting, and all the rules and regulations that go with it, then and only then, move on.
This means start by choosing countries where the market entry is easy for you as a first timer. A good example would be one without any language barriers and where the economy is similar to our own. If you understand how trade works, in your chosen country, it is going to make your life a whole lot easier.
Secondly, rather than trying to grow a market in another country, pick one where that market already exists. That way you will know that there is already a customer base so you are not starting from scratch. Of course it also means that there will be competition, but at least you know people are interested in what you’re selling.
Any good business will understand the importance of market research. The difference here is you are doing it from your UK base rather than the country in which you want to sell. It should not make that much difference at the start. Research is research. Some businesses hire specialist independent researchers who understand the overseas market. Whether that is worthwhile depends on your business development budget and the financial risk you’re taking.
Take advantage of the resources which are freely and readily available, particularly UKTI. It operates a programme called Passport to Export. You can get a grant towards research. It isn’t much but it all helps. UKTI can give you local support. Their staff have the knowledge and contacts and work from the British Embassy or Consul. They’ll be able to put you in touch with the local Chamber of Commerce or that country’s equivalent. It is a fast and easy way to connect with that market.
We’ve found that, in the creative sector, UKTI are a great help. We took part in their overseas trade missions which gave us the opportunity to see how things work. Using them you can start to localise your communications. In other words you get to meet, face to face, the people working in that country who may well be able to help you – even if they are not going to be customers directly. At least you have started to make a connection and are building a relationship….and good business is all about relationships.
UKTI can also help with advice on everything from taxation, managing a business overseas and what different markets are looking for. If you are serious about exporting it is time well spent to attend their seminars.
You need to take a careful look at whether you can compete in the overseas market. You have to take into account everything, including things like postage, which can get overlooked. Will this make you less competitive when it comes to pricing? Be realistic. How much longer will it take to get your product to the customer compared with buying in country? What happens if it needs to be returned? Work out your margins but think about having an additional buffer for the unknown.
Are you going to sell in Euros or Dollars and if so will you still get the same price if your terms and conditions are 60 or 90 days payment terms? What impact will the exchange rate have? What happens if it changes? If you are not careful you could end up losing thousands of pounds. Work out, from the start, how you are going to manage this. The devil is always in the details.
Don’t be afraid to ask. Never be embarrassed to ask for help either from the UKTI staff or from professionals. Consider speaking to a lawyer if you are operating in another company. It might cost you to start with but better to have the right answer than to find yourself in the wrong and out of pocket some months/years down the line.