World First takes a look at the export environment for those UK small business owners looking out towards new markets in 2016.
It’s been hard to escape the fact that the Pound has taken a hammering through the first couple of months of 2016. Some are blaming the uncertainty caused by the UK’s referendum on EU membership with others instead focusing on dwindling likelihood of an interest rate hike by the Bank of England in the near future.
While the falls in the value of the pound have sometimes been front page news, much of the focus has been on the increased cost to UK holidaymakers. Indeed, while a plate of croquetas and a sherry may be a Euro more dear now than last summer, small businesses looking to take their first foray into exporting may find the weaker pound to their benefit.
The government has declared that boosting exports is one of its priorities, with the Chancellor announcing a doubling of support for British exporters to China in last year’s Budget. And though small businesses may feel they need even more support to be able to crack international markets, there are things they can do themselves:
Take advantage of the opportunities
Less than 20% of UK SMEs export, compared with 33% in the USA and 60% in China. Many small businesses are reluctant to explore international markets but the evidence shows that it could be key to their success. Exporting can have a tremendous impact on small businesses with UKTI research showing that firms who choose to export become 34 per cent more productive in their first year while those already exporting achieve 59 per cent faster productivity growth than non-exporters.
The world is full of opportunities for UK exporters. In fact, many businesses could find that their products are more suited to overseas markets considering the competitive business environment in the UK.
If you’re thinking of exporting, look at what your opportunities are. Do you already get enquiries from customers abroad? Does your product have a unique selling point that transcends cultures? These are all signs that your business could be ready to export. Time to examine the opportunities.
Learn more
Perhaps one of the reasons that more SMEs don’t export is that they don’t know how to. Learn more about what it takes, get knowledge of the markets you want to trade in, take advice from those that have done it themselves and understand the risks involved. Get any training you need.
There are plenty of resources available. Government agencies such as UKTI and the UK Department for Business Innovation & Skills exist solely to help SMEs and small businesses thrive both domestically and abroad and have a range of tools and services to assist them on their way.
For example, the Exporting is GREAT website has an updated database of thousands of live opportunities for SMEs looking to export, all you need to do is type in your specialism and it will come up with a list of potential contracts.
Choose the right place
Let consumer demand drive your strategy. Make sure you choose to sell your product where there is a genuine need for it. Is there the potential for growth? What sort of consumer is likely to benefit from your product and what demographic are they likely to be in? This will enable you to narrow down key markets or tailor your products so they are suitable for export.
Make sure you investigate new markets thoroughly. Consider foreign competition, local customs, laws and industry structure and tweak your plans accordingly. Government advisers can help you with this, UKTI have regional teams with dedicated Language and Culture staff to assist you on your approach and plan a route to success overseas.
Choose the perfect partner
Some businesses choose to work with a partner who is already familiar with the market. This includes working with a distributor who could sell your products locally and a specialist foreign exchange provider who can bring your revenue home. Not only will they make the operation run smoothly, but they can also save you money and a lot of stress.
If you do, make sure you take the time to find a partner that offer a solution that fits around you. Not shopping around can be a costly mistake.
Be there long-term
Once you’ve started to export, commit to sticking it out. There’s nothing worse than finding a good customer only for them to be disappointed when you’ve gone a year or two later. And anyway, why would you leave when you’ve found some good customers; they’re not easy to find in the first place.
And once you’re up and running and you need help with your international transfers, you’ll know where to come too. World First’s currency experts can help, and you’ll get our great exchange rates, which could save you money compared to your bank.
The road to becoming a master of overseas commerce won’t be an easy one, but with the right support and partner structure, you’ll soon be looking for your next international challenge!