30 Jun Boosting exports: 10 tips for export success
If you’re thinking of boosting exports or just starting out in international trade you should know that exporting your goods or services brings a range of benefits for business, at both the micro and macro levels. Exporters are generally more productive, innovative, and resilient to shocks, and data suggests that businesses that export are on average 11% more likely to survive. In the wake of the recent EU referendum result and the uncertainty that comes with it, it’s more important than ever that UK SMEs can establish fruitful and lasting export operations. To help your business make the most of the potential for prosperity and sustainability that exporting provides, we’ve created these ten top tips.
1. Make sure your business is ready to export
Often when a new market opens, there’s an incubation period where the market needs to develop and ripen. Knowing the right time to strike is crucial to success. The same can be said of a business. Ensuring your business is primed and ready, in terms of cash flow, capacity, offering and indeed reputation is key. Do you have the means and the money to crack a new market? Can you afford to spare the resource to concentrate your efforts elsewhere without your main source of income being affected? Make sure you have a strong contingency plan in place.
2. Do your market research
To maximise success, it’s important to examine your target countries’ growth rates, internal market practices and pricing structures. Assess and re-assess your competition and whether your product makes sense in the target market.
Different markets need different approaches to succeed, so learn the culture of the market and read everything on it you can, or visit as often as you can. In some markets trade shows are critical to establishing credibility, so you’ll need to have a clear and visible presence. In other markets it’s more about who you know and who knows you, so you need to understand the subtleties of cultural interaction and relationship development.
Local finance regulations differ from country to country too. Policies will vary on the taxes, duties, customs regulations, and rules you must follow in order to sell in their markets. Be sure to fully understand these, as a reputation for unreliable delivery can soon put a stop to your exporting efforts, not to mention the legal cost of disobeying these regulations.
3. Make the most of government resources
With the UK government recognising the importance of exporting to the financial security, productivity and growth of the kingdom, three main institutions have been set up. They provide financial and business-support advice for SMEs looking to make the most of their exporting opportunities:
• The British Business Bank (BBB)
Set up in 2013 to enable finance markets to work more effectively for SMEs, the BBB is now a one-stop-shop for financial schemes, advice services and expertise. It aims to increase the supply of finance, create a more diverse finance market, and increase SMEs understanding of what options are available. It does sometimes provide guarantees to lenders but does not fund companies directly.
• UK Export Finance (UKEF)
UKEF provides support to UK exporters, primarily by working with UK banks to provide exporters with trade finance solutions to help them win and perform on specific export contracts. It also provides direct advice via export finance advisors.
• UK Trade and Investment (UKTI)
UKTI works with UK businesses by providing expert trade advice and practical support. It promotes and supports overseas companies to see the UK as an attractive destination for setting up or expanding their business. UKTI is also increasingly holding seminars and webinars geared at putting SMEs in touch with experienced exporters.
These support schemes are there to help your business. Take advantage of them.
Always be looking to improve or enhance your offering to stand out from the competition and hone your product for your target markets.
SMEs who are innovative, those who undertake Research and Development, or have
intellectual property, and those with higher productivity are all more likely to export,
and to do so sustainably.” - House of Lords (2013).
5. Establish and nurture international relationships
It can take a long time to establish and develop a successful market, and you’re going to need local help if you want to create a lasting presence. Take the time to create and develop the necessary relationships. And importantly, don’t neglect them if the market then picks up in your own country.
While technology has greatly enhanced our ability to connect with others and selling online can breaking into international markets easier, the importance of meeting key customers and representatives in person must not be underestimated when boosting exports. Once established, get those partnerships working for you.
Depending on the nature of a company's product, it's always a good idea to work with some type of in-country partner in the early stages of an export program” - Daniel L. Gardner, CEO of Ocean World Lines.
Whether it's a selling agent, distributor or wholesaler, it's always a good idea to have local expertise involved when trying to penetrate new overseas markets.” - Daniel L. Gardner, CEO of Ocean World Lines.
6. Go for the easy option
When looking to export, try to make things as easy as possible. Geography, culture and language all play a part in putting up barriers to successful trade. When looking to increase your exports, try to consider markets with which the UK has free-trade agreements in place. They are likely to give you a far better framework for tariffs and will help in the handling of disputes.
Generally it is less risky to start exporting to markets closer to you physically or similar to you culturally and linguistically...” - Frank Lavin, former U.S. undersecretary for international trade at the U.S. Department of Commerce and co-author of “Export Now: Five keys to entering new markets.”
7. Optimise your online presence
Across the U.S., U.K., Germany, Brazil, China, and Australia, international ecommerce is predicted to triple by 2018, reaching $307 billion. The number of international online consumers will grow to 130 million, with 72 million of them using mobile devices to make cross-border purchases, so make sure your website is mobile-friendly.
If you’re relying on ecommerce for boosting exports, make your website more appealing by highlighting clearly your ability to accept international orders. Ensure your website has a multi-language facility where appropriate, and know which international markets will require an in-language customer service experience. Listing your items in local currency and offering clear information on shipping, costs, and countries served is also key.
Nine out of 10 buyers want “buyer protection” for overseas purchases, so offering your customers a checkout option from a trusted, secure and recognized payment processor will make a huge difference. A digital wallet that doesn’t require consumers to share their sensitive financial information with you directly will also help boost your sales.
8. Price correctly for your export markets
You may be successful in your home country with your product set at just the right price point, but new markets demand a fresh appraisal of your prices. When setting the price for your product, make sure it reflects local market averages, inflation rates, expectations, and currency conversions.
9. Make the right shipping decisions
According to internal PayPal research, more than half of those who have shopped internationally in the past 12 months report that delivery costs prevent them from making purchases from another country. If you can, consider offering free shipping.
Take the time to evaluate a few different global shipping service options, including larger shipping companies that offer all-in-one solutions. These solutions may include handling, customs and excise documentation, and shipping calculators, making things a lot easier. Resources like DHL International Shipping, FedEx International Shipping, Parcelforce, and UPS International Shipping can ensure that your products safely reach your shoppers, helping you to establish and maintain a reputation for reliability.
10. Ensure your cash flow is optimised for boosting exports
Perhaps the most important piece of advice for successfully boosting exports is to make sure that you have the necessary cash flow to be able to sustain a successful, ongoing exporting operation.
International trade often results in working capital gaps between supplier terms and customer payments. Ensuring you have the ability to pay your suppliers promptly will mean you can develop a robust supply chain while offering favorable terms to your customers. This increases the potential for successful international trade.
Using a pre-approved, rolling credit facility like Pay4’s that is not secured against your assets, means you’ll have the cash flow immediately available to optimise your supply chain and boost your exports, without being held back by restrictive and slower to approve, asset-based credit terms.
Capitalise on the international marketplace
Despite the changes that may or may not come about due to the Brexit vote, there is still a huge untapped potential for UK SMEs to capitalise on the international marketplace and drive business growth across the country. Indeed, the currently weakened Pound may in fact make it easier for businesses to export goods.
SMEs make up 99% of all businesses in the UK yet only account for 40% of total exports. Thanks to financial constraints, lack of awareness around support initiatives, and limited resources and time, many SMEs are either not exporting when they should, or they are exporting, but not as successfully as they could. Boosting exports should be seen as an opportunity to grow your business in new and exciting ways, but it needn’t be a leap into the unknown. With the unprecedented number of government schemes, information sources and financial options available, the potential for success is now greater than ever.
The decision to go into new markets should be thought of not as one big, irreversible commitment but as a series of smaller experiments from which you can learn.” - Frank Levin