What you need to know when taking the first steps towards international trade.
Exporting is key to success in today’s global economy, with the potential for SMEs doing business overseas an increasingly attractive option. The government has previously announced plans to increase the number of exporters by 100,000 between 2012 and 2020, and the topic of international expansion has never been so popular as more and more businesses eye the scope of opportunity and potential again.
Despite this however, there remains a level of hesitation amongst businesses, many of which are often apprehensive of the best strategy to adopt (possibly due to uncertainty surrounding the EU referendum). For businesses looking to adopt a successful export strategy whilst minimising risk, we have put together a ‘top ten’ list of essential elements to consider:
- Ask some questions: Be very clear in identifying the what’s, where’s and whys that are driving the business towards international expansion. Put together a list of questions to consider when approaching new markets, including what your business will do to differentiate itself from the competition.
- Have a clear plan: After asking some initial questions, it’s essential to consider the strategy and approach, researching all the options in order to gain an accurate picture of the different routes available when approaching new markets.
- Consider potential pitfalls: It’s key that businesses weigh up international expansion as a viable option and consider the potential hurdles – employment laws, varying regulatory frameworks and taxation laws are all key areas for consideration. Research is invaluable.
- Make sure that the business is aware of available support: Funding may form a large part of your business plan. Make sure that you look around when considering the available support. The UK Export Finance (previously ECGD); Export Working Capital Scheme and the Bond Support Scheme are all popular options.
- The value of local partnerships: For any business approaching a new landscape, it is key to have a partner on the ground that can give you the full picture before you commit. There is real value in partnering with a scheme that provides a contact on the ground, who is able to develop relationships and negotiate deals in real-time.
- Placing your product in the right region: Don’t automatically approach certain regions just because they’ve housed success stories in the past. Companies are increasingly looking away from the more well-known areas such as Beijing and Shanghai to lesser-known cities in China, for example, that are growing sector-specific industries. Understand yourtarget audience and recognise what area will work for you.
- Different countries do business differently: Understanding the cultural spheres is extremely important and compromise is a big part of developing business relationships outside of your own territory – make sure that you’re prepared to meet in the middle.
- Accreditation: Many products in territories outside the UK require specific accreditation and certification, the process for which can be time-consuming and carry a cost. Businesses should take the effects of this into careful consideration, as delays may impact time frames and business plans.
- Finding the right match: Partner with suppliers that are passionate about your business and protecting the brand. They needn’t be the biggest or most respected – they may be a small, relatively unheard of family-run company. What’s important is finding out why they want to become an extension of your brand as well as understanding what they can do for you on the ground.
- Understand the market and adapt the brand accordingly: Whilst there are a number of technical aspects that are hugely important, one over-arching element for consideration should be the importance of adapting the brand to different cultures. Not all products translate and it’s essential to understand the demand for a certain product or service, what’s already being done in the space, as well as what your competitors are doing.