Preparation vital to successful exporting

Expert says lessons can be learned from Jack Reacher’s approach

While we don’t know the effect that Brexit will have on exports and the wider economy, it is probably best to take the “Jack Reacher” approach – prepare for the worst, hope for the best.

Policy at both Westminster and Holyrood is to increase the export of our goods and services to the wider world.

In the wake of Brexit the UK Government has created a new Department for International Trade tasked with striking and extending trade agreements between the UK and non-EU states.

The Scottish Government is working on an ambitious programme of internationalisation and trade.

While Brexit has brought uncertainty, it has elicited a governmental commitment to supporting UK businesses expanding into foreign markets.

There are many sources of advice for researching your market and assessing your export potential.

In addition to commercial factors, it is essential to give consideration to the many legal factors relevant in expanding your business into an overseas territory.

The following points give a flavour of some of the issues for consideration.

There are a variety of routes to a new market. A relationship with a trusted distributor or agent can be a great way to break into new territories.

Establishing an overseas base is a risky and expensive way to explore a new market.

An agent or distributor will already be familiar with local regulations and cultural differences.

Under a distribution arrangement a supplier sells their products to the distributor who then sells the products on to their customers, adding a margin to cover their own costs and profit.

Under an agency arrangement, the exporter appoints the agent to negotiate and potentially conclude contracts with customers on the principal’s behalf.

A benefit of going down the distributor route is that Commercial Agents Regulations do not apply.

Picture: PA Tom Cruise as Jack Reacher.