If you are serious about trading internationally, you will want to think about how to research, target and grow a presence in overseas markets.
But how should you begin? How do you even know whether exporting is right for you? Before you commit to exporting you need to honestly assess your export potential – both in terms of the readiness of your business and of your product or service. The following steps should help you to do this.
Assess your export capabilities
Business Link’s online tool ‘Are you ready to export?’ provides a quick, basic assessment of your export capabilities and the issues and practicalities you need to know about before beginning to export. The tool provides a useful starting point for discussions with a UKTI International Trade Adviser (see ‘Who can help me export?’ and ‘UKTI contacts’ later in this guide). ITAs can draw on years of business experience and give you – at no cost – a more detailed assessment and practical advice on a one-to-one basis.
Carry out market research
It is essential to carry out detailed market research to identify and evaluate the target market. Areas to examine include:
– the industry structure;
– the predicted demand for your product or service;
– the competition and how you plan to fit into that marketplace; and
– any modifications required to make your product or service saleable.
Desk research is a good starting point – an increasing amount of information is available online – but you may also wish to consider commissioning some bespoke research from an export specialist.
UKTI’s Overseas Market Introduction Service (OMIS) draws on the local knowledge and expertise of its staff around the world. The cost of this is very competitive.
Make an export plan
After completing your market research, you can draw up an export plan defining how you will enter the new market. That should include:
– a marketing strategy which incorporates international trade development;
– an understanding of the route to market, e.g. the preferred distribution channel for your products or services;
– the chosen business model e.g. agent, distributor, B2B, sales office, joint venture or subsidiary company;
– the necessary financial resources;
– the right people to develop the new export markets;
– adequate knowledge of the requirements of your chosen market – e.g. modifying packaging to meet local regulations and standards; and
– an understanding of export payment mechanisms and export finance.
Assess your product/service
To assess whether your product/ service is suitable for export to your target market, consider:
– consumer preferences, competitive offers (local production and imported) and their market share;
– product standards and regulations in the overseas market – the British Standards Institution offers help for exporters; and
– the costs of adapting your product or service.
Understand the law
There are various legal responsibilities associated with doing business overseas – all of which you should understand before starting to export. For example, you’ll need to familiarise yourself with the VAT rules administered by HM Revenue & Customs (HMRC), and be aware of any export controls which relate to your particular product.