The impact of Brexit is at the forefront of all our minds when it comes to exporting and the effects it will have on the European and global trading markets for UK exporters. Yet exporting continues to represent a great opportunity for business growth and according to the latest report from Barclays, over the past five years there has been a 36% rise in demand for British products.
However when it comes to planning your export strategy, the key to success will be in your preparation. Online guidance and information about exporting is widespread, so it is vital that you make the most of the knowledge that is available from experts in the field.
It is also important that you liaise with those at your company who will be involved, making sure they are well briefed and understand your exporting plans. Maybe consider an export training program with your local chamber of commerce, to make sure they are prepared for changes that are likely to impact your business.
So if you are an SME looking to plan your export strategy, here are some key ideas to help you get started.
#1 Research your target markets
Is there actually a need for your product or service?
To find this out you need to do your homework to identify and evaluate where your potential target markets might be. Researching the country, industry structure and the existing competition will help you assess the need, the possible modifications that might be needed and the markets you should focus on.
Online business data platforms such as Kompass EasyBusiness are the ideal tool to help you research your target markets, as well as identify key contacts, by giving you access to millions of locally sourced & detailed company profiles and contacts across 70 countries.
#2 Think about the competition
Ask yourself – can your company be competitive in the overseas marketplace?
What is your USP? What makes your products & services stand out from the crowd?
You need to build a clear picture of your competition, their market share and how their products or services compare with yours. This will help you to identify the overseas marketplaces in which your business will have the biggest impact.
Doing field research and visiting trade shows are a good way to help with this and organisations like the Department for International Trade can provide you with invaluable guidance and advice to get you started. Trade shows are also a good way to arrange meetings with several potential customers at the same time and to market your products or services. They also give you an opportunity to find agents, distributors and of course potential prospects.
#3 Focus on your potential customers
Do you understand who & where your ‘potential’ customers are located and how to communicate with them?
Being respectful of the language and cultural differences will go a long way in helping to create positive business relationships when trading overseas. For example if face-to-face meetings are expected you will need to make them a part of your export plans. A really helpful place to start is with the DIT’s exporting country guides which focus on a whole range of useful information on a country by country basis.
Also think about language differences? Consider when English is acceptable and when you might need to use a translator. One quick win would be adding your company to Kompass - the online B2B directory, which enables you to add translations to your company profile in 26 languages. This is an ideal way to make sure you reach a bigger audience overseas and communicate directly with them in their language.
#4 Plan your distribution strategy
Consider how will you enter the market?
A successful distribution strategy will look to identify the best sales channels for your company by finding the most effective sales route to market which is economically viable and meets your business needs.
Your choice of distribution channel will be influenced by your products or services - will you sell through online marketplaces? - through an agent or distributor? – by licencing or franchising your business? – through a joint venture or partnership?
It may prove more cost-effective to sell through other companies, rather than directly to the end-user. Working with sales agents or distributors is a great way to expand your business, where the cost would otherwise limit your ability to reach overseas customers. Some key aspects to this will be keeping control on pricing and branding and making sure you build a positive relationship with your agents/distributors.
#5 Find potential prospects
For all export sales and promotion, the basic principles of effective marketing will still apply, but you should customise your sales & marketing strategy to match your target markets.
You need to take into account cultural factors, specific traditions, country specific legislation and the available marketing channels. Consider your marketing resources - do you have the capital in place to support this venture?
Potential customers in your new market need a reason to choose your product or service over local competitors and failing to meet their needs will reduce your export success. So the more time and effort that is applied at the planning stage will undoubtedly pay dividends in the long run.
· How is business done in your company's sector? If sales are actually completed at trade fairs, it is important that your company and sales managers are represented.
· You can use Business Information to help you find the right prospects – segmenting your target markets will help you focus your marketing efforts in the right places.
· Make sure you focus on your company’s strengths – this will give you the edge over the competition and help to overcome any lack in international experience.
· Consider as a priority the online Digital Marketing of your products or services, within a globally focused marketplace – there is little point in having an amazing product or service to offer, if no-one can find it or even knows about it!
#6 Take advantage of the social selling channel
You know your existing customers, but how can you build upon this knowledge to find new customers?
Social selling offers a great opportunity to connect with potential prospects; the challenge is to do this effectively.
There are various sales intelligence tools on the market that can help you do this such as LinkedIn Sales Navigator and ByPath - the latter takes Big Data from 200k online sources such as social networks, blogs, news feeds & twitter. Giving you access to more than 200m contacts across 60 countries, ByPath works to identify new business opportunities and help you engage more successfully with those prospects.
#7 Create an effective promotional plan
Your business needs to present itself as both customer-focused and internationally capable. The first touchpoint for potential overseas customers is likely to be your website, so translating your website into additional languages may be one of the best marketing decisions you can make.
At the very least building landing pages suitable for your key target market makes sense. Start modestly perhaps with translations into just one language and try to test the translations on some potential customers to gain their feedback.
You could also promote your business internationally by creating a great.gov.uk trade profile – a great way to connect directly with international buyers
· How easy is to find your company? – Is your existing domain suitable for your export market? Some domains just don’t translate well so check it out before making a decision. You can also use global marketplaces such as Kompass to promote your business.
· Create focused social media campaigns – Other online factors to consider are your social media presence – do you need language specific pages, your Google Ad word campaigns – perhaps a geographic/location specific campaign may be useful? Work through all of these considerations to ensure your site is easily found in your target market.
· Consider visiting your export market – Scan the market for potential trade events in your target country – trade fairs, exhibitions and networking events will help your depth of knowledge, alongside meeting potential customers, making sales appointments and sourcing new distributors if required.
#8 Be smart and plan your finances
Any recovery in sterling over the next few years will likely depend on the Brexit deal that is finally negotiated, but at the moment, UK based SME’s can take advantage of the weaker pound when trading overseas. However post-Brexit, that advantage will depend on whether export costs & additional paperwork can be kept to a minimum.
In the meantime, it is vital to know what the potential cost of exporting might be to your business – from start-up costs, exchange rates and the cost of shipping to devising a realistic pricing strategy, so our quick guide to planning your export finances could be a helpful starting point, because these factors will all impact on your budget allocation and possible profit margins.
You need to consider validity periods, production, shipping and stipulate credit terms that are both agreeable and the most suitable for each customer. Taxes, freight costs, insurances and product modifications will also affect the final price you can charge for your products or services.
Undoubtedly the most important part of any business is making sure you get paid, so it is vital that you take into account the various factors relating to export, that could impact your financial status. Protect your company from the risks of non-payment, by doing your homework - credit checking potential customers and agreeing to clear payment terms. In unpredictable foreign currency markets using 30-90 day short dated forward contracts, which lock in daily rates for delivery later, can also be an effective way for you to take control of the risks linked to adverse market fluctuations.
Export should be seen as an investment and you will need to make sure you are able to cover the initial costs of research, developing contacts, and possible losses incurred before sales. Keep in mind that it may be necessary to explore separate financial arrangements in order to support your exporting ventures and consider taking out trade credit insurance to make sure that you safeguard your cashflow.
#9 You need to think logistically
When looking to trade internationally you will need to think about planning your transport & logistics - key aspects to this will be looking at the most economic delivery options, the role of freight forwarders and whether you should consider outsourcing your shipping.
We know that post-Brexit brings a range of potential outcomes that will have a different impact on the exporters of goods & the providers of services, such as the financial industry. However current legislation will continue to apply until the UK has formally left the EU and trade negotiations have been concluded.
When it comes to freight forwarders, it is vital to use both a quick and dependable international carrier, because a poor delivery service will not reflect well on your business. Consider their capabilities, their customer service reputation, safety record and company stability, as well as the cost of course!
Any paperwork relating to exporting requires diligence and attention to detail, so you should ensure that you and your team are familiar with the do’s & don’ts. Processes will also need to be in place to facilitate exporting abroad, which include understanding customs, taxation and export licencing. Our quick guide to transport documentation looks at some of the key information you need to know and in our related blog post on export legislation inside & beyond the EU you will also find useful information about paying VAT & duty, the UK trade tariff and using Incoterms.
#10 Protecting your intellectual property rights
IP (Intellectual property) rights are territorial so they only give protection in the countries where they are granted or registered. If you only have UK protection, others may be allowed to use your IP abroad without infringing your rights, so when trading overseas you need to consider registering your IP rights abroad, especially before contacting any potential distributors.
Some countries may allow you to extend your UK protection, and accept it as protected in that country after completing certain local formalities. The World Intellectual Property Office provides a list of all national IP offices where you can get more advice and information.
Remember that trademarks can be a logo, a shape, a word, a style or a colour so keep in mind the diverse ways in which your product or service might be identified as yours internationally. This useful video may help to answer any questions you might have about protecting your IP abroad and you can read more about protecting your intellectual property rights here.
#11 Make an export plan
Your export plan should summarise the decisions you have made based on your market research. It should include your objectives and outline how you intend to accomplish them. Make sure you keep your plan structured and logical by including realistic goals that are achievable. You can then share your export plan with all interested parties, such as banks, investors & partners:
· Summarise the reasons for exporting your products/services, as well as the benefits
· Consider your USP and what sets you apart from the competition
· Outline changes that are needed to your products/services to meet new market expectations
· Who are your target markets and why they have been chosen
· How do you intend to market your products/services?
· What will you do to protect your intellectual property rights?
· What will be your route to market?
· How will your export plan be resourced?
· How will you manage logistics such as transport, distribution, customs & licences
· Outline your key objectives, your targets and how they will be measured
#12 Exporting represents a great business opportunity
Building a global presence takes time and it's necessary to acknowledge that other countries may handle deals differently, so achieving successful sales can take longer. There will be barriers to overcome – from language & culture to paperwork & logistics and being successful will rely on how well you handle the whole process. However whilst exporting abroad may not always be a quick win, it will undoubtedly offer great opportunities for growing your business.
Get advice from the experts!
Finally, perhaps our most important piece of advice - make sure you ask for help as this will prove invaluable at all stages of the export process. Try to speak to organisations or businesses who have experience in successful overseas trade, who can give you a realistic perspective about what is achievable and how best to approach doing business overseas. Here are some useful links:
– Use Kompass Business Data to research and find contacts in your target markets.
– COBCOE helps businesses by promoting international trade across Europe.
– Your Local Chamber of Commerce can help with export documentation and finance.
– UK Export Finance provides trade finance and insurance for exporting.
– The Institute of Export gives advice, guidance, offers courses and qualifications.
- Build an effective social selling channel with ByPath, the business sales intelligence tool.
Disclaimer: Please note that this blog only contains general information and insights about legal matters. The information is not advice, and should not be treated as such. Kompass.com