Small businesses nees to research 3lobal market

PEOPLE AND SKILLS: Exporting

Industry experts claim that exporting goods abroad can make small businesses more competitive, innovative and potentially raise productivity by up to a third in the first year alone.

Breaking into international markets isn’t easy for the small business. Exporting products abroad can be complex and time consuming, therefore business owners in pursuit of global opportunities need to research into the key principles and legislation of exporting to grasp the scope of expansion. Most UK companies with a good track record for exporting are already successful.

According to the Scottish Government’s recent survey, Scotland’s international exports (excluding oil and gas) increased in 2016 by £460 million from £29.3 billion in 2015 to £29.8 billion in 2016, with the USA continuing to be Scotland’s top international export destination country (£4.8 billion).

This has been good news not only for Scottish businesses, but also for employment, product and service development and economic stability.

But it does mean that businesses have to think carefully when considering exporting. Points include: • Think carefully, don’t make the jump into exporting unless your company is already enjoying increasing sales on home ground. Carry out a competitor analysis. Establish whether your competitors in the UK are already exporting, including who your local competitors would be in the new markets. This will allow you to assess your competitive advantage on market entry. • Investigate the level of demand for your product abroad. • Assess if your company has the financial resources for international market development and additional staffing resources to satisfy an increase in product demand. • Consider the standard practices in the countries you are exporting to – obtaining local knowledge will be important when launching your products internationally.

The risks

There are potential financial, product and operational risks when exporting products into international markets. It is essential to conduct some research into the prospective countries.

This will help you understand the local standard practices and identify any necessary precautions you may need to make.

Key issues for consideration

Insure against non-payment of export invoices. Alternatively try to negotiate up-front payment or set up payment stages. Fluctuating exchange rates. Any changes in currency rates can impact on your profit margins. Build a market information system to monitor environmental trends. Make sure your product is compliant. It’s imperative that you check your product specifications against local regulations and standards abroad to avoid severe penalties. Be vigilant about product quality. If you must transfer your manufacturing operations overseas to meet the country’s regulations, stay involved to ensure quality doesn’t suffer. There may be licensing requirements. If you are exporting machining tools, electronic equipment, computers or telecoms equipment, you will need a license.

Shipping and Logistics

Setting up an efficient and cost effective process for moving goods is essential to successful international growth.

Marketing

You will need to adapt your UK-based marketing strategy to make it more relevant to your new markets abroad. • Carry out appropriate market segmentation to help you understand your customer needs. Understand the different cultural sensitivities and what impact this may have on your marketing activity. Redesign relevant packaging, literature, advertising and point of sale. Translate your product literature into different languages. Review your tone of voice and communications to fit the country you are exporting to.

‘‘ An efficient ans cost effective process for moving goods is essential

Liz Jackson is the managing director of complete recruitment and HR solutions company, Fairways. She is also the former chair of CIPD Scotland, which represents over 10,000 HR professionals nationally.