The CBI reports that only one in five of the UK’s small and medium-sized businesses currently export and businesses are 11% more likely to survive if they export.
Many SMEs are in ‘survival mode’ in recent years and some have explored other markets and made strategic decisions that may have a positive impact on their bottom line. It is important, therefore, that SMEs overcome barriers to fulfil their international potential and sustain growth.
However, selling internationally can be complex and here are some tips that could help SMEs to take their first steps to accessing markets beyond our shore. These are just a starter for ten to get you off the ground if you are thinking about crossing the pond to our English speaking cousins, or exploring the potential of the 1.3 billion population in China.
You may know your product inside out, and may have a gut feeling for a particular new market, nevertheless, just like any new market you want to enter on home turf, it is important to get to know as much as you can about the new territories you want to export to. Also bear in mind, it is easier to fulfil demand than to try to create one.
Our export mantra is communications, communications, communications. Linked to this mantra are our 6 C’s to exporting:
- Culture: Have a great team on the ground and know the business model and culture…
- Who is going to help you in the potential new territory? You and your team are key to your business success, and if you are creating a presence in-country, you will do well to have your own people rather then head hunt locally.
- Who are you going to sell to? Understand the new market that you’re going to, including GDP figures and demographics, disposable income and spending trends.
- How do they do business and what will you need to change or adapt, to operate in this market? If you are selling B2B, what is the business culture, such as whether local partnership is essential, and in some instances be prepared for a long courtship.
- Customers – who are they and how are you marketing, brand building, social media, networking…
- What tools are you using to market your product and reach your target customers? If using multi media campaign mix, get to know which modes of communications are most relevant and maximise your products’ exposure to key target audiences. For example, WeChat is a popular social media platform in the Far East and little used in UK.
- How are you going to present your product or service? If you are promoting a product, packaging protects as well as attracts attention at selling point, however, be mindful of environmental sustainability agenda in the new market?
- Can your trading name be used in its current format? What does it mean locally or vernacularly and, is it used by someone else already? What’s the market’s attitude to copyright, design rights and trademarks?
- Connecting with your customers, agents, distributors, partners, media…
- How are you going to communicate with your customers? Many businesses dip their toes into English speaking markets where there are clearly benefits in sharing a common language. Would the local law require that the local language is used or is translation an important?
- What are the logistics and communications infrastructures like in the main cities and beyond – not just the road system for delivering physical products but also broadband to enable you to contact and access customers? Although English is seen as an international business language, only 25% of online searches are done in English and is one of the top three languages in 2013 with Chinese heading the bill.
- Crunch the numbers-Calculate import duties, currency fluctuations that impact on margins…
- What factors might impact on your price, such as tax and duties imposed?
- Which currency do they use and how can you plan to mitigate against any currency risks? Yours and your customer’s terms and conditions, settlement days and discounts attached to settlement.
- What method of payment do they use and how much does that cost?
- Confidence-know your business, the opportunities and the possibilities…
- Test the market to check that they need your product or service, or how much modification it may need to be accepted, such as colour or size. Red is lucky in China but may mean something else in other markets?
- Listen and learn from your collaborators, keeping an open mind. Be realistic, sometimes you have to be prepared to be flexible following opportunities that may arise instead of being wedded to your business plan.
- Collaborate – locally and at home…
- Who can help you to make the first steps to deliver to new makes? UKTI, your local Chamber of Commerce, in country Chamber of Commerce, British Council and Export Britain. Get leads for free once you’re registered into the UKTI and other networks by signing up for their newsletters and help forums, including free or low-cost seminars, webinars, information and networking events. For B2B opportunities check out Innovate UK’s EU Enterprise Network site too. They promote sector-specific opportunities, including details on grant funding in agri-tech, biotech and engineering innovation.
There are many more things to watch out for when exporting that we have not mentioned and, most importantly, making a profit on the sale. We hope our 6 C’s will get you started towards your export journey.
Contact us for your communications support in exporting to new territories.