With the total value of the UK exports market equating to over £300 billion in 2016 (Source: HMRC) exports is a lucrative market which can bring significant revenue benefits for your company.
So if you’re looking to expand your business model then developing trade with the international market could be the way forward for you.
But what do you need to consider before entering the global export market?
Choosing where to export
The key to developing any customer base is research. When deciding on countries that you are interested in exporting to, be sure to carry out a risk assessment; Are the areas politically and economically stable? And if so, are they appropriate markets for your business venture? Some things you may wish to consider in deciding whether to proceed with exporting to the markets that you are investigating are:
- What percentage of companies are exporting and importing at present?
- Are your competitors successful in the country that you are looking to export to? If yes, why? If no, why not?
- Is the market saturated? Is there enough market share available for you to make your exports business model profitable?
Developing your product for the export market
Does your current product / service fit the market that you are looking to export to or does it need adapting? Even big name brands such as Pepsi and McDonalds have faced situations where they have had to adapt their brand to fit their international markets. Areas in which you might have to consider tweaking your strategy to fit the customer profile of your new market include:
- Product names and brand slogans
- Marketing materials for products – imagery and / or colours
Understand the culture of your export market
It’s also imperative to get a good understanding of local culture in developing your brand in an International market. Aside of the obvious language barriers that can be faced, the way that you conduct business with new suppliers, distributors and retailers could make or break a business deal. Awareness of what impact these cultural differences could have on the way you communicate with these new contacts will help to maximise your company’s potential in succeeding abroad.
Choosing the best business model
In embarking on exporting to international markets there are a variety of avenues that can be used. You may choose to adopt an ecommerce export model, in which instance remember to consider if there is a requirement to develop a new website for your new market?
Alternatively you can find local distributors to help bring your product to the International market.
Either of these instances entail less investment and lower risk than direct entry models such as full investments or joint ventures.
Financial considerations in exporting
Financially, there are of course additional shipping costs involved in exporting your products Internationally. However, utilising a freight forwarder to arrange your shipping requirements on your behalf can have a positive effect on your net profit as freight forwarders are in a position to negotiate cheaper rates with the shipping providers. Many freight forwarders are also experienced in customs and their in-depth knowledge of tax rates, duty and regulations places them in a position to be able to help speed up the availability of products to your markets as well as save you additional revenue.
It’s also important to note that business is likely to be conducted in local currency so you need to be aware to account for exchange rates when conducting financial analysis.
We have outlined a number of considerations you should take before embarking on exporting, and there is certainly huge potential for your company to grow and make more money by doing so if you do it right. The key is to plan and seek advice and assistance. The great news is, there is plenty of advice and assistance, including funding available. A good place to start is the Department for International Trade.
With thousands of UK companies already successfully exporting to International markets, don’t get left behind.