THE UK Government wants exports to double to £1 trillion a year by 2020.
Last year British exports were up 11 per cent to £50bn
Taking the leap into emerging markets can be daunting especially for small companies. There are differences in language and culture as well as other pitfalls
There is ample advice available for businesses considering exporting, for example banks, UK Trade Investment, British Exporters Association, UK Export Finance, International Chamber of Commerce, British International Freight Association to name but a few.
The key steps to follow in considering exporting are:
l Assess your export potential; assess suitability of your goods/services for export; consider whether your product/service offers enough profit margin to absorb the costs of being exported; identify foreign laws and standards which will affect your product – you may need to modify to meet market/cultural requirements; consider if you want IP (Intellectual Property) protection overseas
l Analyse the benefits exporting could bring; turnover / profit increases; falls in demand in home market can be offset against export sales;
l Identify possible pitfalls; taking eye off home market; may have to travel abroad and spend much time negotiating a deal; getting paid - make sure you get terms of sales right from outset and seek secure payments; many would be exporters fail to penetrate export markets because they fail to understand language, culture & legal systems
l Choose right route to market; consider agents, distributors, trade shows and going direct
l Getting paid; time lag between shipment and paymentaffects cash flow; use internationally recognised terms ie Incoterms 2010; look to manage your currency fluctuations through your Bank; consider finance options eg Trade Finance, Invoice Finance, Letters Of Credit; consider insuring debts
l Know your legal obligations; complete relevant paperwork; Freight Forwarder will offer advice; comply with VAT rules; certain goods need an export licence
l Get your product to market; consider how crucial speed of delivery is ie perishables – ensure transport, packaging and labelling conforms to International requirements