This article comes from a 3-part interview we ran with John Robinson, the Chairman of the Academic Board at the Institute of Export & International Trade, on export readiness and what exporters need to know about importing.
John also runs the Institute’s ‘An Introduction to Importing’ course.
What are the main factors an exporter should consider when thinking about their export readiness?
You have to have a sound base.
You should be financially stable and have a good base to start exporting from because exporting is going to be different. Exporting will throw up different and new, possibly unimagined challenges. These could be cultural, regulatory or anything.
The company is going to spend time away from doing what it’s supposed to be doing in order to deal with these new challenges. They have to be in a position to dedicate time to these new challenges, time away from their core business, in order to overcome them in a professional and effective manner.
If time is money, they’ll presumably need to be able to set aside money for the time, learning the skills and also to mitigate against any costs incurred by making mistakes?
We learn by mistakes of course. A business will need spend time in learning new skills associated with either importing or exporting. While they’re doing that the business will have to keep ticking over in its own time or be capable of supporting some non-profitable times while these skills are being acquired.
The company has to develop a competence in the skills involved in importing and exporting and this does take time – no one can get to a competent level of skill over night. International trade has a very steep learning curve and there is very little scope for taking your time.
When you get it wrong you’ve usually muddied the waters in some country or other – whether with HMRC here or your buyer’s country’s authorities. En even worse consequence is that you’ve highlighted an area of the marketplace to your competitor and they’ll see what’s gone wrong and then pick up the customers you’ve lost out on due to your mistakes.
Would you ever recommend to a business to sit back and wait for their competitors to go in and make a mistake before you do?
With any company effort in a marketplace, they should be aware of what their main competitors in their specific area are doing.
We don’t shy away from competitors. They’re interesting people by the virtue of they’re being competitors. They must have been successful in some way in order to be competitors.
We should study them and find out what they’re doing – what they’re doing well and what we can learn from this to improve our own offering in the marketplace.
Is it recommended to spend money on bringing someone into your company with an import/export qualification or CV?
If the new company owner wants to acquire for him or herself the necessary level of expertise for export readiness it would take a lot of time. In one sense when you’re employing a specialist you are employing years of experience. So the short-term answer is yes you buy in expertise.
At the same time the small business shouldn’t forget that they can also in time develop or acquire the same expertise and this can help cut costs across the business. Investing in skills is like investing in people.
The Institute of Export & International Trade obviously advocates investing in personal development of skills through qualifications. When buying in expertise in the form of an export manager, though, how can you evidence that the person is the right person with the right or appropriate skills? You’d check their CV for qualifications obviously.
Qualifications evidence the skills that are there and you can you use those skills right from the start, which is a great shortcut.
For the SME who is at capacity in terms of staff, and short of time, how can they bridge that skills gap?
Short courses – for example the IOE course on incoterms.
An SME is aware of incoterms and reads the notices from HMRC and the advice on them, and they realise that incoterms are quite important.
They don’t have the resource for someone to take over as a full-time manager so what do they do? They go on an incoterms course and they focus on it and they learn very quickly what they need to know.
Admittedly, they have to have the skills to identify what skills they need in the first place, but if they don’t have that, the chances are that the business won’t be set up well for export anyway.
So presumably if the company has no skills and has no time to acquire them, they don’t have that export readiness …
It’s a little chicken and egg of course but yes that’s true.