Napoleon once called Britain “a nation of shopkeepers”.
Little has changed. SMEs are still the backbone of the British economy, punching far above their weight, with SMEs accounting for more than half the value of UK exports.
But we know that exporting is a tricky business, and we aim to unmuddy the waters for you.
In this comprehensive guide to exporting, we’ll provide some useful value-adding tips to optimise your exporting enterprise.
This article at a glance
Exporting is a tricky business at the best of times. You have to get to grip with regulations. Reevaulate your pricing. Develop local networks. Ship your goods effectively. All the while maintaining a healthy cash flow. It’s important to do your research.
1. Carry out prior research
Before you move in the troops, get a lay of the land.
Having an in-depth knowledge of the country’s socio-economic and cultural make-up is a game-changer for exporters.
This includes delving deeply into the religious practices of the country in question. After all, your product might alienate a particular religious group. In other words, don’t try to sell pork in Oman.
Moreover, your overseas customers might not need your product, or the price tag may be too hefty for them. At what price could you sell your product while still make a profit?
If people are already buying a similar product from your competitors, look into what strategy they’re deploying. Is it working? If not, why not? More importantly, how could you distinguish your product from their product?
2. Actively seek opportunities
Now get some boots on the ground and establish a local network.
Trade shows are a great way of doing this – you can meet buyers, distributors and competitors. Generate new business. Best of all, you can build a local network.
That’s not all. Trade shows are a great way to sieve out opportunities in the UK and abroad. Stay up to date with the latest trade shows here.
3. Plan your export strategy
Think hard about your export strategy.
Consider whether you have enough bandwidth to meet demand overseas. You may need to scale up your operations and hire more people. If so, you should consider getting financial support. But more on that later.
Legal requirements differ from country to country. Does your packaging adhere to their trade standards?
Ultimately, you’ll need to choose the most effective distribution channel. You could sell directly. Go through a sales agent, or a distributor, or set up a joint venture.
In the end, ensure you protect your intellectual property and that all parties are in agreement over their responsibilities for payment and delivery.
4. Execute your marketing strategy
Advertising is all about knowing your audience, so ensure you deploy a marketing strategy that your audience will respond well to.
The importance of social media marketing
Harness the power of social media. Whether it’s Facebook, Instagram, Twitter or LinkedIn, social media marketing is a quick and cheap way to promote your products. Indeed, more than half of consumers discover new products on social media.
Social media is a conversation, so talk to people. Inform them about new products. Let the world know of your successes.
Take Dyson for example – the brand is one of the UK’s most popular exported brands. Unsurprising, considering that they have nailed their marketing strategy.
Dyson uses social media to garner hype for their upcoming products, ride the waves of popular culture like Star Wars Day (May 4) and connect with consumers. In short, they talk. Brands with a social media presence are seen as more ‘human’, according to one study – it’s critical to get it right.
Why search engine optimisation (SEO) is important for businesses
Create a website with localised content to appeal to your overseas customers. This includes pricing your product in the local currency. Consider hiring a Search Engine Optimisation (SEO) specialist (also known as a ‘growth hacker’) to help you appear higher in search engine results.
5. Be clear about the admin
Nobody likes paperwork. Even accountants. But a clean and efficient business administration ensures a smooth and frictionless exporting experience.
For example, having the correct documentation. Without it, there can be no contract, no payment, no transport.
Countries have different requirements, so use HM Revenue & Customs (HMRC) to help you. The local UK embassy at your chosen market can also help you identify the requirements for customs, forms, registrations and payments.
6. Take advantage of government support
Exporting is critical for the British government because it bolsters productivity, enhances financial security and promotes growth. It’s in their interests to make your exporting venture a glittering success.
As a result, there is plenty of business support available to SMEs looking to export to overseas markets.
UK Export Finance (UKEF) works with British banks to offer exporters trade finance solutions and help them win export contracts.
The British Business Bank (BBB) provides expert advice for SMEs and helps them find financial support.
UK Trade and Investment (UKTI) offers expert trade advice and helps SMEs expand their global reach.
7. Develop an effective export pricing strategy
Pricing your product competitively is a delicate balancing act. There are so many factors to consider. Market demand. Competition. Product-related costs. Overheads. Tax and duties. Insurance. Sales commissions. Transport costs.
Even if your pricing strategy has been successful in your home country, entering foreign markets requires a total reappraisal of your pricing strategy. You have to ensure your product is priced in line with the local market average, reflecting currency conversions and inflation rates.
8. Transport goods effectively
Exporting requires transport, and you want the best – a fast, secure and dependable international carrier that will reflect well on your business.
There are a few factors to mull over. Cost is important, but you don’t want to sacrifice safety in the name of saving money. What is the carrier’s reputation for safety? What’s their customer service like?
Larger shipping companies offer all-in-one solutions – from handling, customs and excise documentation to shipping calculators. The most reputable shipping companies include the following:
- FedEx International shipping
- UPS International Shipping
- DHL International Shipping
9. Maintain a healthy cash flow
Gaps in working capital are a fact of life in international trade. Therefore, get to grips with your cash flow.
Regularly paying your suppliers on time helps with maintaining a healthy cash flow. However, sometimes this isn’t possible. Consider using trade finance products to keep the engine running.
SME trade finance allows businesses in the UK to receive financing from financial institutions to bridge the cash-flow gap.
A Letter of Credit is useful. A financial institution becomes your guarantor – promising that they will pay if you can’t.
If you need money quickly, you could consider factoring. You sell your invoices at a discounted rate to a third-party financial institution, who in turn sells the invoices to the supplier.
10. Put effort into your after-sales service
Your promotional effort doesn’t stop after a sale. Once your customer base has been established, it is crucial to stay in touch to ensure they are happy with your level of service. This builds trust and loyalty.
Do business without borders
Silverbird doesn’t just offer you tips – we offer real-world solutions.
Silverbird offers business accounts tailored exclusively to global SMEs exporting all over the world. With Silverbird, you can hold, transfer and exchange foreign currencies online with just a single account. Convert 30+ currencies. Avoid low forex rates when transferring funds with multi-currency accounts catered to your needs.
Enjoy a free and frictionless free trade experience with Silverbird. Sign up today and make it a reality.
Author: Melissa Yeo
Illustration: Kate Faldina