Thinking of international growth? Five top tips for getting exports right
Recent growth in UK manufacturing has allowed quiet optimism to seep back in to the industry. However, new research from the British Chamber of Commerce suggests Britain's manufacturing exports are 'approaching stagnation' - cause for concern for an industry that makes up 44 percent of total UK exports.
We recently spoke to senior decision makers in the industry, and found that of those UK manufacturing SMEs already trading overseas, 91 percent saw international expansion as one of the best ways to grow their business. Exporting can have a tremendous impact on small businesses, with UKTI research showing that firms who choose to export become 34 percent more productive in their first year, while those already exporting achieve 59 percent faster productivity growth than non-exporters.
Often with exporting, it’s the first step which proves the greatest hurdle. Unlike many other countries, UK businesses can be apathetic towards exporting. A recent YouGov poll revealed that well over half the sample of British businesses traded solely within the UK, 90 percent of those respondents have no ambition of pushing their produce overseas.
This is why the Government are pushing businesses to export more. UKTI’s ‘Exporting is Great’ week is the latest initiative to bring more balance to the UK’s trade account deficit, whilst the Chancellor also recently announced a £20m fund earmarked for directly assisting UK firms to export for the first time.
Exporting can be a daunting task, but for UK manufactures there is a realm of opportunity in international trade expansion. Here are my top tips for would-be manufacturing exporters.
1. Make sure your product has international reach
According to UKTI, the UK has exported £128m in cosmetics to the UAE, £120m of aluminium to India and £43m of carpets to the Netherlands in previous years. These export success stories would not have come about without savvy market research and testing; read up so you’re not flying blind.
Let consumer demand drive your strategy. What sort of consumer is likely to benefit from your product and what demographic are they likely to be in? This will enable you to narrow down key markets or tailor your products so they are suitable for export.
2. Know your target market
Assuming you can simply replicate your UK strategy for overseas success is a fool’s errand. Make sure you investigate new markets thoroughly. First, decide on the top one to three new markets with potential and then research the landscape - consider foreign competition, local customs, laws and industry structure and tweak your plans accordingly. Government advisers can help you with this, UKTI have regional teams with dedicated Language and Culture staff to assist you on your approach and plan a route to success overseas.
3. Use the resources and support available
Small firms looking to take advantage of export opportunities needn’t worry about resources. Government agencies such as UKTI and the UK Department for Business Innovation & Skills exist solely to help SMEs and small businesses thrive both domestically and abroad and have a range of tools and services to assist them on their way.
For example, the Exporting is Great website has an updated database of thousands of live opportunities for SMEs looking to export, all you need to do is type in your specialism and it will come up with a list of potential contracts.
4. Sweat the small stuff
Typically, businesses will spend days and nights perfecting your product, catering to the target market and planning for business expansions but not attach the same importance to the details like finding the right logistics partner or international payments solution.
It is just as important to spend time researching any service providers or partners who will be an important part of the exporting process. Not shopping around could end up being a costly mistake. No one wants to end up with a logistics partner that loses their goods in transit or with a bank that charges them high fees for bringing their hard earned revenue home.
5. Don’t give up
Exporting overseas is a commitment – there will be investment costs (time and money) that will require time to overcome before your plans and hard work begin to pay off. The road to becoming a master of overseas commerce won’t be an easy one, but with the right support and partner structure, you’ll soon be looking for your next international challenge.
Exporting can offer a world of opportunity, quite literally. It’s also worth remembering that the UK Government is committed to helping UK businesses to export through UKTI – this is an invaluable source of information and support. Don’t hesitate to use it.
Marca Wosoba is Head of International Development at World First