Small businesses considering exporting need to bear in mind that what works at home may not work in another market but sometimes the best advice may seem a little obvious but the simplest questions can often be the most searching.
Although the UK economy is at last delivering growth, many SMEs realised a simple truth during the global financial : domestic markets cannot always be relied on, and exporting not only provides additional revenue it can diversify risk.
1. “Is it a good idea?”
According to Rosana Mirkovic, head of SME policy at the Association of Chartered Certified Accountants , an SME needs to bear in mind that what works at home may not work in another market.
You need to factor in how much time you will need to devote to getting exports off the ground and what impact that will have on your domestic market.
Even language and cultural barriers, not to mention legal obstacles, in other markets need to be considered
2. Trade advice
Paul Alger, director of international business development at the UK Fashion & Textile Association believes that talking to your industrys association makes perfect sense for answering questions you may not have even realised you needed to ask.
3. Stamps, office or partner
If there appears to be a receptive market, the next big question is always going to be how to stimulate and fulfil demand. For the lone eBay buyer and seller this is probably no more of an issue than getting parcels weighed by the post office or courier. For a more ambitious plan to set up a local presence for the company, the big question is: what form should this take?
After looking at the option of a partnership or setting up new offices in unfamiliar markets, William Crawford of Concrete Canvas opted to tap in to local knowledge through deals with distribution partners who are already active on the ground.
“The hardest aspect of using a pure distribution model is finding the right partners,” he says. “This is the single biggest factor in determining whether a market is successful. However, when you find the right partner and establish a good relationship, business can be very effective, efficient and enjoyable.
“For exporting without a local presence, my top tip is to find a distribution partner who is focused on your customer base, a good cultural fit with your business, and who understands your product and route to market.”
4. Getting paid
Quoting and invoicing can be a particular challenge because of exchange rates and the fact that terminologies and specifications of products differ from country to country, he says.
5. The legal bit
SME owners are naturally optimistic when it comes to new partners and opportunities but it always pays to ask the “what ifs” before a deal is done. That way you can ensure you are on a firmer footing when it comes to having goods accepted and paid for. Crucially, an SME also then knows whom it can turn to in order to seek redress.
Steve Beahan, partner at national law firm Irwin Mitchell, advises SMEs on exporting and finds that one of the most crucial points that many need to understand is whose law is going to apply to a deal.
“Exporting can be lucrative, but it can also lead to an increase in commercial disputes and these can be expensive and time consuming to resolve – especially for smaller firms who may be dipping their toe for the first time,” he cautions.
“A business must at the beginning of the process ensure that its contract is watertight, ensure that it understands what jurisdiction covers the agreement, and check that its standard terms and conditions are up to date.”
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