Exporting made simple: getting the finances right

The financial side of trading abroad must be considered; it is vital to your business. If you are going to become an international trader you need to be very aware of the strength of your banking partners as you develop wider demands and deal with endless currency transactions and challenges. Every international bank has guides and publications on each country you may wish to trade in. Get them; they are both free and useful.

Be very aware that outside the UK your contracts are worthless, so getting payment for your goods is everything – selling is only part of the proposition. Only deliver once you have the money, or when you have cast-iron terms of trading such as a letter of credit drawn on a reputable bank. Learn the value of the use of letters of credit to grow your business by having your bank explain them to you. Then, working with your client in partnership, perfect between you the exact details of the letter of credit before presentation to the bank. Never do these negotiations through the bank as every change costs money; in fact, do not go to your bank until you are completely happy with the definitions of terms. And always say no to business that will not pay on your terms. My first slippery customer was in Russia. It took literally months for money transfers to be made, but the orders were sizable – and were only actually made when the money was in my bank.

Topics: Export Planning, Finance, and Payments
Export Action Plan