In very simple terms if an SME gets it right its profits could rise dramatically: good news for both the SME, your own practice and the wider UK economy.
But getting started can be the major problem. It is still a sad fact that most exporters fall into export accidentally and not because it’s part of their strategy. Typically, they have a customer who, by chance, happens to be located outside of the UK. They then go on to develop this relationship and by word of mouth build other customers in the same country.
This starting point works, but for most businesses it would be far better to build an export strategy into existing plans. All SMEs have business plans: some will be more sophisticated than others. In the most basic plan it is all about knowing which customers to target and ensuring you have the product, team and finances to achieve this. So you really have no excuse if suitable clients ignore the enormous potential of the export market – you just need to help them create a plan!
The starting point
It is not always easy to know where to start. It’s also hard to know what to investigate first. From thinking about specific countries to broader issues such as culture, product protection, regulation, delivery options, finance options, taxes or the resources within your business to deliver these new opportunities.
As with all business ventures, the key to success is to plan how you will pick off these challenges. Ask three key questions:
- Is there a market for this product or service?
- Does the business have sufficient management resources: can it make this someone’s job?
- Will it make a worthwhile profit from the activity?
The key point to remember is that such activity needs a leader and sponsor to succeed. Choose the best person within the business with the drive to deliver and empower them to do so.
The person responsible for creating the business plan/strategy will be faced with many daunting questions as they conduct their early research and start to construct a plan. At this point it is easy to get distracted and lose sight of the whole point of the exercise – to get paid and make a profit!
Ensure they stay focused by considering the following key questions:
- What is the unique selling point to the business’s proposition?
- Where will the product or service work?
- What are the legal barriers?
- Where in the market would it start?
- Does the business need a network both in the UK and the target country?
- What resources will be needed – management time, agent time, advisers’ time?
- What finance is required to fund the project (both the research and ongoing business)?
- What support is available (financial and advice)?
- Has the business identified and evaluated the business risks (such as protecting intellectual property and knowhow)?
- Can the business access the profits it will generate?
- What infrastructure does it need (is a presence in the country required/ or a network of agents/ or a translated website)?
Get professional help
There are many other sources of help available, including:
- a bank adviser for education, finance and networks
- UKTI website – including a range of country guides aimed at British businesses which are interested in developing and doing business overseas. From basic information through to start-up, legal, tax and customs considerations they also contain useful contact details
- Institute of Export for education and networks
- Intellectual Property Office – its IPEquip tool can help you see what can be protected.
Is it working?
Don’t forget, a business plan should be regularly reviewed to ensure the export strategy is working and will deliver for the business. If not, amend it.
Finally, don’t feel that SMEs always have to look at growth markets. Why not start where others have already done the legwork – Europe and the US are obvious examples and continue to be profitable places to trade with.
Article contributed by ACCA