Chancellor’s Statement Helps Business to Make Export Waves
09 December 2013
This development places the onus on smaller businesses that are potentially part of a supply chain to take the initiative and make sure that they are recognised by both UK Trade & Investment (UKTI) and the relevant industry bodies. It will also allow UK Export Finance to provide wider services within its ‘working capital product’ for smaller businesses.
It must also put the onus on all businesses to look at why they are not exporting. With so much support available surely this is the time to look at the potential to export for every company. So why don’t they?
Our latest survey with TAEFL stated that although nearly 1 in 2 companies reported that there were no issues preventing them from developing overseas markets.
Of those that did report issues, 31% said that obtaining finance was a major consideration, with 27% reporting that it was hard to establish trustworthy contacts overseas – a challenge which was also hindering their development into these markets. Twenty three per cent highlighted that red tape, such as export legislation in the buyers’ country, was preventing them from developing markets, 18% said that a lack of knowledge of exporting was holding them back – and 11% did not know who to speak to.
Putting it crudely we need to ‘get our act together’ or we will lose opportunities to other better informed companies – and they may not be British. One of the main things holding British business back isn’t lack of finance (although it is a contributing factor once the export opportunity has been found). A lack of curiosity is preventing us from finding out how to trade internationally properly. Looking at the big picture is great but once a trade has been agreed the detail is still a priority if a profit is to be made.
Businesses should not need Government help to enter a new market. Entry should be a simple extension to the marketing activity that they naturally start to seek out new markets and a wider audience for their goods. Let’s educate our young people to ensure that they know what steps need to be taken to look further than our own back garden.
The Institute runs a very good helpline to assist in the detail – however the planning should be down to the business. To reach an export market other than Europe a company should factor in the following:
- Detailed research about the market regulation in terms of the product offered i.e. electronic certification; packaging requirements; language requirements; marketing restrictions; market research with regard to acceptability of product; taxes that might be attracted by your product; sales channels i.e. distribution/agency – legal aspects of the sales and Intellectual Property must be considered and any licensing must be able to work and collect monies easily; what is the best price and how will the business get paid and cover any risks if necessary?
- Flying out to an exhibition ideally as a visitor to WALK the show and find out how that market operates UKTI a Trade Access Programme see UKTI website.
- Establish a list of contacts from UKTI and, having understood who the company is targeting, buy a list of contacts generated by the excellent embassies and high commissions around the world.
- Establish a plan internally and obtain board level commitment to international trade.
- Visit the new markets – enlist the support of UKTI who can sort out an itinerary. Arrange meetings and, where needed, brief an interpreter to work with the business for the duration of the visit.
- When back in the UK the business should be making arrangements to move forward and to establish a launch of some sort. This launch needs planning and a budget is required to ensure that the marketing is correct and that it is not just a ‘wet weekend’ launch.
- The process outlined above should involve around 4-5 visits from start to launch – visas and flights hotels and subsistence are all part of this investment and should be included in the refunds.
- The entire process requires a budget which should be treated as an investment, spending money in the UK on sales and marketing is not different to spending money to develop a new market. It needs to be part of a full programme of activity, exporting is not an add on – it is an integral part of the Business Plan and needs to be treated with commitment to make it work.
There is an argument that the OMIS (as in France) should only be charged once the sales have started – but that might be going too far! It could be linked to the Targeted Export Support Scheme.
The Institute of Export is here to help your businesses make a profit out of your new market call us on 01733 404400.