By Adam Unsworth, Sales Director at Plastic Card Services (PCS)
A recent YouGov report revealed that six in ten small to medium-sized enterprises (SMEs) are expected to be exporting by 2016 - a 20 per cent increase on 2014. Therefore, it is more important than ever for businesses to be equipped with the right knowledge to overcome potential barriers they may face when doing business in foreign markets.
As every market is different, businesses must thoroughly research their target markets before jumping in at the deep end. Ensuring they are aware of any specific demands, or direct competition, can really help set a business apart and have a substantial effect on the long-term success of taking services overseas.
Fluctuating rates and debtor days
When exporting to a country with a different currency, fluctuating exchange rates can have a significant effect on the price of the market as a whole and ultimately determine profit.
It’s worthwhile putting a strategy in place, such as a forward fixing an agreed rate and researching the number of debtor days in target markets to give a steer on cash flow.
Cultural nuances of target markets can be easily overlooked if thorough research isn’t undertaken. In some instances this can not only be a cultural faux pas, but can also be detrimental to repeat orders. For example, for those targeting Scandinavia, it’s often the case that environmentally credible businesses are more highly regarded when it comes to making the purchasing decision. Therefore, by highlighting your sustainability credentials and introducing a new, ecologically friendly product to the market can be a real bonus, as we found with Coop Danmark.
As well as researching your target market, having a ‘person on the ground’ can not only help to overcome any language or cultural differences, but also open up a wide network of opportunities and faster routes into the market.
With the correct agent in place, businesses can quickly establish if there is a demand for the product or service being exported, without the upfront risk and cost of advertising, marketing, prospecting and relocating.
Going the extra mile
It’s clear then that the key to an SME exporting successfully is to gain an in-depth understanding of the target market. By doing your research, taking a flexible approach and tailoring products to meet specific expectations, businesses can ensure they set themselves apart in what can often be a highly competitive market.