Is there a demand for your products and services outside the UK? If so, this could be a huge opportunity for your business. In fact, a 2015 survey revealed that six out of every ten SMEs in the UK expected to be trading internationally by 2016. A 20 per cent increase on the number of companies trading internationally then.
If you’d like to start selling internationally, then here are a few basics to get you started.
Export business for beginners
The prospect of your business venturing into international waters may feel quite intimidating, so here are some of the advantages and risks to consider before dipping your toe in:
Advantages of trading internationally
Growth – Perhaps one of the more obvious advantages is that you are greatly expanding your pool of potential customers by making your product or service available internationally.
Spreading Risk – We all know that saying about not putting all your eggs in one basket…the same is true for your business in one market.
Increasing Margins – By timing your international business smartly, it’s possible that you can exploit situations to your advantage where either the pound is weak or international currencies are going through fluctuations.
Risks of trading internationally
Political or Legal – if foreign laws or policies change then these could have a negative impact on your business. Trading internationally also means that you need to be aware of international business laws and requirements to ensure that you are trading compliantly.
Currency Fluctuations – as we discussed above, while these can be exploited to your advantage, there is always the risk that sudden currency changes could negatively impact your business. To avoid this, in some cases you may be able to fix your currency rate for a year.
Starting an export business
If you decide that the risks are worth the potential benefits and you’re keen to get started with trading internationally then here are some helpful tips to get you started.
Deciding where to export
Before stepping into a new international market, it’s vital that you do your research and fully immerse yourself in everything about that particular country which may impact your export success with them. Things to consider are:
- Their current economic and political climate – in particular for your particular business niche
- Any legal requirements that they have when it comes to doing business in their country
- Protecting your intellectual property
- Any language or cultural issues which will need to be overcome
For more information on this, take a look at the gov.co.uk advice
Managing your costs up front
Make sure you plan your costs carefully. You will no doubt find that you will come across additional logistical costs when it comes to trading internationally as opposed to the UK. Be prepared for these up front so they’re planned into your budget.
Getting trade finance
If you will need some help to finance the initial costs of setting up your international exports then you may be able to apply for trade finance .
Here is a useful video on Gov.UK.
You’re much more likely to be successful if you have a good Business Credit Score so make sure you check this before you apply. You can do so with My Business Profile go on over and see how we can help.
Deciding who to work with
In the same way that should research a country before starting to trade there, you should also do some research into the international companies and clients that you want to work with. Just as you might do over here in the UK, a great place to start would be to check their credit report. By doing this, you can ensure that they are likely to be reliable payers and meet their financial obligations to you.
For more information, head over to our International Business and Company Credit Reports page and we’ll tell you how to get started.