The government has made it a priority in recent years to increase the UK’s exporting activity providing lots of support especially to SMEs who want to exploit this opportunity. Six out of ten UK SMEs anticipate doing business internationally In 20161, according to research. UKTI reveals UK businesses that export, on average, experience 34 per cent uplift in productivity in the first year and become one-third more efficient subsequently2. Industry experts claim that exporting makes SMEs more competitive, innovative and raises productivity by up to a third in the first year alone3. The difficulty is knowing when you should do this and if your company and product or service is ready? Leaping into new markets can be intimidating, when faced with the unknowns of cross-border selling and the potential maze of regulation and culture differences. We’ve outlined some questions below which you can ask yourself to decide if you’re ready to be exporting abroad yet.
What are the unique selling points of your product/service? And will this be applicable in the overseas market?
You may have a very unique selling point that currently fits the UK market and customers but think carefully about the common practices of the country that you’re looking to enter. What are their common practices and lifestyle arrangements that you should pay attention to? Are there any particular laws that restrain you from selling your product? For example, Singapore has banned chewing gum. If it’s appropriate, consider the modifications you may need to make to the product such as imagery or languages.
Is your business model scalable and are there any legal barriers?
You have your business model to operate in the UK figured out, but can this be extended and expanded to overseas use? To achieve success and sustainability in an overseas market, consider if your business model will be able to handle the expansion and its potential to be enlarged to accommodate the growth. Not every business model is scalable, for example, some businesses may face decreased profit margins rather than economies of scale as a result of growth. Take into account the cost of acquiring new customers along with the costs of nurturing them in an overseas environment.
Do you have sufficient finance and resources?
First and foremost, do you have the finance needed to invest in exporting overseas? Depending on whether you decide to partner up with an established business, the initial investment could be high. Especially when the majority of international trade is conducted on open account where goods are shipped and delivered to the customer before payment is due which could affect your working capital. You’d need extra stock of your product or extra support if it’s a service, and what about staff, can they all speak the local language or will they need retraining? Evaluate whether you can make these commitments in the long-run and how much of an effect they’ll have on your current day to day operations.
Are you ready for the commitment?
There’s no doubt that a lot of work, time and effort will need to be put into implementing your plan and strategy to export overseas. Take time to carefully think about how much you want this, how much benefit it’ll bring to your business and what the opportunity costs are. You need to be ambitious and committed for this to succeed before you even embark on all the research to delve into the feasibility of it. Once you know you’re committed, then go ahead and start your research and create a structured strategic plan to know what lies ahead for you.