Import, export and our business success – Case Study
Richard O’Shea, 36, and his father Frank are the co-directors of Appropriate Applications – a thriving import / export business selling mosquito nets and cattle fly insecticide. Richard explains how supplying farmers, aid organisations and multinationals in Africa has helped his company go from strength to strength.
Plan for challenges and opportunities
Richard and Frank knew there would be extra challenges working with foreign suppliers and buyers so prepared themselves in advance. “We did our homework meticulously and expected that legal headaches with import and export regulations, logistics and finding new customers would be the biggest hurdles – so we were prepared when they came.
“We spoke to many quality, established suppliers who had been shipping internationally for years to get recommendations and advice when we started out.”
Of course not all problems can be foreseen and Richard faced a potentially major business threat in 2006 when the World Health Organisation (WHO) unexpectedly gave an endorsement to just two manufacturers in the mosquito net market, neither of whom were suppliers, effectively locking out Appropriate Applications from selling to big, established customers overnight. Undaunted, Richard pursued a host of smaller aid organisations as potential customers and built up a new customer base.
“In time WHO certified other manufacturers and the situation eased,” he says, “but in the meantime we asked all our clients ‘What else do you buy?’. Using that information we became a purchasing agent for a number of them and for a very wide variety of goods that we source and import from all over the world.”
Be tough on terms
“We have learnt along the way that finding suppliers and customers who are good and reliable with payment is not easy. Even some longer-term customers we thought we could trust have broken payment promises.
“The only 100% way to avoid cash flow problems is to not pay suppliers upfront for anything and to ask for payment in advance from all your customers. Needless to say this isn’t possible all the time, but there is usually a way to build in a sliding scale of payments to suppliers and from customers so you’re not too exposed.
“We will only pay upfront if we are being paid upfront. Getting paid very late – and sometimes never – has made us tougher. If you can find three suppliers of the same product one of them will usually offer good terms.”
Never stop researching
“I can’t emphasise enough how important thorough and continuous research is to making importing and exporting a success,” says Richard. “You can learn the hard way by surviving a few non-payments and discovering what you did wrong as you go along. Or you can do your homework in great detail before committing time and money to a project – make it a sure success from the start. Remember, the topline figure may sound great, but it’s not so great if you never get paid.”
“We have always focused on international trade and have therefore never been afraid of it. The domestic downturn has not affected us and I love speaking to people from all over the world on an everyday basis.”
Richard O’Shea, co-director, Appropriate Applications
- Start planning your own export strategy with the help of the UKTI’s comprehensive, helpful 10-step plan.