Given that higher exports not only reduce the trade deficit, but also create international connections between firms with a much wider pool of ideas, it is perhaps unsurprising that the government has been explicit about the need to grow exports.
Chancellor George Osborne aims to double UK exports to £1tn per year by 2020 and get 100,000 more companies exporting as part of the UKTI’s National Export Challenge.
UKTI’s success has previously been highlighted by the launch of Britain’s first International Festival for Business (IFB), which helped to boost UK exports and generate thousands of new jobs.
But let’s first consider whether the desired scale of export growth is likely given recent trends. If the government is to reach its target by 2020, exports will need to grow by roughly nine per cent each year, yet the average annual growth rate even during the boom years was five per cent.
However, although the expected growth may be tough to achieve, there are positive signs that the UK is in a good position to increase export growth overall. After all, Britain’s export of products hit a record high in 2013, rising to £304.3bn from £300.5bn in 2012.
(1) Methodical research
Exporting in many respects is an extension of the normal way of doing business. The additional challenges arise from unfamiliarity, different customs, practices, language and legal frameworks. With BRIC countries (Brazil, Russia, India and China) quickly gaining importance, it stands to reasons that a good deal of research is needed – especially when it comes to choosing a market for your goods.
Sukhdeep Dhillon, global economic adviser at the British Chambers of Commerce (BCC), said: “Look at what support is available from governments, both UK and others. Research the market as much as you can beforehand and definitely pay a visit. You need to find out for yourself what the market is like and what are the legitimate businesses out there. Exporting can feel like an exciting new departure but you also need to evaluate it coolly, as you would any business decision.king to the digital sphere to purchase goods, online vendors such as Amazon and Alibaba may prove to be great assets to your exporting endeavour. A further investigation into your market could also reveal specialised sites for your products.
“The market may be completely different, the laws and regulations and so on; it may be protected in certain ways. Will you, too, need to label your product in a different way, how many days will it take to get paid, how confident are you that you even will get paid?”
Don’t forget that “market” in this context could just as easily mean online as a physical country or region. This can often offer a cheaper or easier alternative to entering an overseas market than having to get boots on the ground.
With the increasing rise of shoppers taking to the digital sphere to purchase goods, online vendors such as Amazon and Alibaba may prove to be great assets to your exporting endeavour. A further investigation into your market could also reveal specialised sites for your products.
Available government help
According to Russell Grazier, regional director, global transaction services at NatWest, any firm’s port of call should be the UK Trade & Investment site. UKTI advisors, stationed across 40 offices, are available to help businesses consider market prospects and trade procedures.
Furthermore, it offers an Overseas Market Introduction Service, which Grazier claimed could help businesses “register online to get details of businesses that have registered trade abroad and want British products”.
A natural resource can be found in UKTI’s Passport to Export Service, which is a support programme for SMEs.
Read more on exporting:
- Working towards the government’s 2020 export target starts now
- UK businesses blame lack of finance for export delays
- The key fundamentals to address for any business considering exporting
(2) Partner up
Dhillon suggested that businesses going into a new export market, needed to consider partnering with someone. Pointing to a recent BCC survey, she revealed that more than 60 per cent of bosses cited finding agents or distributors as their biggest headache.
She added: “You also need to assess how credible and legitimate they are and how they are supported, and having a chamber behind them can be helpful.”
Available government help
BCC developed a network of accredited chambers overseas with the help of UKTI in 2012. One of its online offerings – named Export Britain – is a platform through which businesses could connect with potential agents, distributors, lawyers.
Furthermore, the Export Agents website contains the government’s list of commercial agents who can help sell your goods abroad.
(3) Keep your paperwork in order
Hugh Bailey, director of the British Exporters Association (BexA), suggested that it’s vital that any paperwork is in order and that firms carefully maintained all records. This comes hand in hand with knowing export laws of the country you’re trading with.
Requirements on customs duties, VAT and excise present additional considerations, so it’s important to swot up on the laws particular to your chosen market. Also make sure that the terms of your agreement with the supplier are absolutely clear.
“A few hundreds of pounds spent on training key staff in export procedures could well save thousands (or more) in the future,” Bailey added.
Available government help
The BexA website offers a checklist for new exporters – a collation of the top 20 recommendations for new exporters – while the Institute of Chartered Accountants in England and Wales (ICAEW) offers a variety of resources to help firms identify the necessary accountancy support through its business advice service.
Another potential resource comes in the form of the Institute of Export.
Stay tuned for part two next month to find out about more fantastic services at every British exporters’ disposal.
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