Beginning to export can be daunting, but well worth the effort if you can find a market that is receptive to your goods or services. Our guide provides information
Economic growth in the UK is expected to remain slow at best, but some overseas markets are witnessing double-digit expansion and spiking consumer demand. This has forced companies to reassess their target markets and explore new areas of growth and opportunity.
Much like language, knowing how to behave when doing business overseas shows respect for local cultures and a willingness to make things work. There are many different customs and cultural norms to consider, so it pays to be familiar with the place you are visiting. Refer to the top tips in our country pages for insight into different markets.
Managing foreign exchange is important. Companies dealing in overseas markets will have to use foreign currency at some point but volatility in the markets means forecasting costs for the year ahead can be full of risk if a currency value changes dramatically. As one company director told Insider: “I’ve heard many economists and foreign exchange gurus speak, and without sounding cynical, nobody has an idea what it going to happen.”
Companies trading overseas should treat customers the same as they would in the UK. Carry out a credit check before you enter into an agreement and start trading cautiously; as you get to know a business it will be easier to move along the security scale from pro forma invoices to open account trading via intermediate steps such as letters of credit, according to UK Trade & Investment.
Protecting your product when expanding overseas is of paramount importance. The UK is widely regarded for its production of high-end technology and systems and many emerging economies would love to acquire this kind of expertise. Of course, there are ways in which this can be done on a formal basis through technology sharing agreements and acquisition, but the fact remains that any business considering foreign trade should consider the implications on their trade marks.
English might be the international language of business, but that doesn’t mean you can leave your phrase book at home. Our place in the world has meant that some companies assume they can walk into a new situation abroad and treat it like they were in the UK. In many countries it pays to learn some appropriate words and phrases to come across as polite, well researched and respectful to your hosts and potential business partners.
The letter of the law will apply to the sale of good overseas, just like it would in the UK. It is important that companies know what they are getting into, and are happy with the terms agreed between parties. Many businesses have concerns that they will need specialist advice for dealing with legal issues in a particular market and this is broadly true. If you are entering into an agreement governed by the law of that jurisdiction then the advice points in this direction.
The growth of overseas manufacturing has led many businesses in the UK to operate design and back office functions at home, while operating production facilities abroad. Low-cost bases in China and South East Asia mean companies can get their goods made for less than the UK, but the cost and logistics of shipping have to be factored into the equation. For companies exporting their goods to market, this is also an important consideration.
Selling products overseas should be an integral part of the company’s overall marketing plan. It should support the strategic goals of the business and meet specific international objectives over the next one to three years. What resources will be needed and what actions will the company need to take to ensure success?
Companies need to raise finance for overseas trade as much as they do for trading in their home market. The difference here, though, is that the time lag for getting paid tends to be longer for international orders, and this slower cash flow is one of the major barriers for companies selling overseas, according to UK Trade & Investment.
There are plenty of success stories in the South West to inspire you to ply your trade in foreign fields.
