If your domestic sales are faltering or there are overseas markets where you think you might pick up trade, it is essential to do your research before making plans to export. Kate Horstead finds out how to take advantage of export opportunities
UK Trade & Investment (UKTI) North West director, Clive Drinkwater, believes that now could be the ideal time for small firms to start exporting.
“The current circumstances are unique,” he points out. “The pound’s value has decreased, which is a massive advantage for businesses paid in foreign currency. In addition, some overseas markets continue to grow handsomely despite the recession.”
Identify target export markets
Before you start exporting, you need solid knowledge of your potential markets. Start by approaching UKTI for a free consultation. “UKTI’s advisers can help you to find the right markets for your product or service,” says Drinkwater.
“To predict likely demand for your business, your first step should be to find out about the state of a potential export country’s economy and its demographic,” he adds.
UKTI will direct you to the relevant organisation to do this — for example, the UK India Business Council if you are thinking about exporting to India. The British Chambers of Commerce (BCC) can also put you in contact with the appropriate international chambers.
In addition, these organisations can help you to find out who your potential competitors might be.
Understanding the law abroad
Knowledge of the legal restrictions in different countries is essential. “UKTI, the BCC or the resident British Embassy can all help you to find local interpreters, lawyers, and distributors who can clarify the restrictions,” says Drinkwater.
Tariffs, duties and taxes will also differ. You can contact the HMRC Tariff Classification Service Enquiry line on 01702 366 077 to find out if your goods are restricted, if you need a licence to export them, or if there are any duties to pay when they arrive in the destination country. Alternatively, search the online Trade Tariff tool on the GOV.UK website.
In addition, it is important to research the cultural variations between countries, which may affect the way you market your goods or services. Again, UKTI can advise you on this and also offers seminars on business etiquette abroad.
Firms can apply to several Government-funded schemes to help them research foreign markets.
UKTI’s Passport to Export programme offers free mentoring, as well as commissioning market research on behalf of users. Grants are also available through the scheme to attend overseas trade fairs.
Alternatively, for a small fee, the UKTI’s Overseas Market Introduction Service provides businesses with a research report to see if their product is suitable for a particular market and how they should enter it.
“Market research usually involves a cost, but the return can be significant,” says Drinkwater. “UKTI recently showed that firms new to exporting experience an average 34% increase in productivity in the first year.
“By growing successfully overseas, you’ll learn how to meet varying customer demands, which will enable you to grow your UK sales, too,” he concludes.