Expanding into an overseas market can be a daunting experience for any business, regardless of its size. Luckily, expert advice is on hand as Dr Adam Marshall, executive director of Policy and External Affairs at the British Chambers of Commerce, discusses the main steps for SMEs planning to enter an export market…
Exporting throws up a whole new range of legislative and logistical challenges and is certainly not without its risks, but with careful planning and assistance from business support organisations, as well as advice from other experienced exporters, the potential benefits for companies can far outweigh the risks.
Exporting doesn’t just offer benefits to individual businesses – as a country we have a substantial trade deficit that needs to be addressed. In 2012, the Prime Minister set a challenge of doubling UK exports to £1 trillion by 2020. However, at current growth rates we are not likely to reach this until 2034 – that’s 14 years behind schedule. This highlights the vital importance of encouraging as many businesses as possible to explore exporting their goods and services. As a nation, Brand Britain already has an excellent reputation globally and there is significant demand for our products in overseas markets.
The following five steps outline the main points that any company considering exporting should take into account when drawing up its plans and are applicable to any overseas market.
The decision to start exporting may be based on pure business intuition or, as many businesses find, it may follow a number of new orders from overseas that point to a bigger export opportunity. Whether you're a new exporter or an established one looking to expand into new markets, the first step is to correctly evaluate the opportunity.
Gathering market intelligence is vital groundwork, so exporters should identify those markets that offer the biggest opportunity and gather as much information as possible, either remotely or from people on the ground. This is where it's important to speak to companies and business organisations that have an established presence in the market that you're looking at. The British Chambers of Commerce Export Britain website has a growing database of Market Snapshots that offer a great place to start for insight and data, and our Global Business Network in key overseas locations are able to offer on the ground support and knowledge for potential exporters.
Thorough market research should consider: which markets use your services or products, which have experienced the most growth and are predicted to grow the most; cultural or religious practices in the target market that may affect demand; the demographics and geographical structure of the market (ie particular areas or cities to target); barriers to exporting in that country or region; who your main competitors are likely to be.
There are also opportunities at home for businesses to explore export markets. Accredited Chambers around the UK run regular events highlighting the opportunities for export in strategically important international markets. Many of these events take the form of short, informative seminars, delivering knowledge and insight in a concise format.
The British Chambers of Commerce also hold regular international trade-focused seminars, open to all members, which present a great opportunity to access a wealth of information and advice, ask questions of the Chamber and meet other businesses that are also considering a move into international trade.
After identifying and researching the overseas market offering the greatest potential, it is equally important to take a realistic view about your business' readiness to embark on international trade. Ensuring that the appropriate resources, knowledge and skills are in place is key and accredited Chambers of Commerce can help in this assessment process.
At a basic level, an accredited Chamber will help evaluate the appropriateness of a business' products and services for export, and the infrastructure it has in place to support international trade.
A more thorough and detailed assessment will include reviews of intellectual property risks, trademarks, branding, packaging, pricing, safety certification, customs regulations and relevant legislation. If required, the Export Readiness Assessment can also include a review of your business' infrastructure, covering sales & marketing, operations, and financial readiness. These are all things potential exporters should start considering early on.
In tomorrow’s instalment of our Far Horizon series, we take a look at step two: the planning process…