Marc Jones
Atradius UK
Ask the Expert: Starting to export
Marc Jones, head of sales at Atradius UK, offers guidance to companies looking to export.
Q: It’s broadly acknowledged that export is going to be key for our economic recovery, but it’s hard to know where to start - where should a business begin?
Recently, the CBI & Ernst and Young released a report, “Winning Overseas – boosting business export performance”, calling for government to re-orientate our economy towards overseas markets and aiming to increase net exports from -2.4 per cent in 2010 to 2.5 per cent by 2016. They estimate that this alone could add £20bn to our economy by 2020.
But you are right, exporting is a challenge. Whilst we know that export is key to our recovery, export success rests on a solid understanding of the risks involved and managing them effectively. So, here is our advice:
Firstly, know your market - the markets which hold most opportunity for your products may also be ones where you have the least experience and knowledge. Entering into wholly new markets requires more than just a leap of faith, and you should always use the experience of others where possible. You should be able to understand the local political and cultural environments as well as the commercial ones. Forging links with chambers of commerce, local trading groups and trade associations helps, but you should also draw on the experience of your banks, insurance parties and agents too.
Secondly, know your customer. What’s the competition? Is there local demand? If a market seems right, identify potential customers and research them. Obtain official and unofficial data through stock markets, official bodies or even Google alerts. Once you make contact, be transparent – and demand the same in return. Global business culture has undergone a seismic shift – the sharing of up-to-date trading information is now the “norm”, particularly when offering trade credit terms. Also be very aware of the cultural nuances of trade. Your approach may serve you well in Europe, but may well need to be tailored in Asia or Africa.
Finally, know your risks. In the latest Atradius Payment Practices Barometer, our twice yearly survey of over 5000 businesses around the globe and their real payment experiences, British businesses reported 35 per cent of export invoices unpaid at their due date and 6.2 per cent of export receivables becoming delinquent. Equally worryingly, in 40 per cent of cases, lack of funds were cited as the explanation. At Atradius we are lucky - we hold trading data on 60 million businesses, giving us an unparalleled picture of global trade. This isn’t the case for most businesses If you don’t have time, resource or expertise to effectively risk assess a new market, don’t just cross your fingers. No matter how you protect your business, do so. Trade credit insurance is one option and does two key things:
- It will assess your trading risks – domestic and export - On your behalf and let you know whether or not your trading partner is someone you should do business with, guiding you away from risks which could damage your business
- If your buyer is subsequently impacted by something unexpected and they are unable to pay,a claim will pay up to 90 per cent of monies you are owed, so you get paid no matter what the circumstances
If you are considering some new ventures – or if you’d like to keep existing ones safe - and would like some advice, get in touch.
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About Marc
Contact Details
Marc Jones
Head of Sales,
Atradius UK
marc.jones@atradius.com
02920 824 777
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