Last month, the UKTI introduced Headstart: a service that provides practical support, including access to local business networks and temporary office space, for SMEs looking to export to high-growth markets in south-east Asia for the first time.
?We want to see another 100,000 businesses exporting by 2020. Helping more small firms to do so is vital to securing a return to long-term and sustainable growth?, said Trade and Investment minister Lord Green, who launched the initiative.
But taking operations to Asia is a step that seems daunting to many growing businesses. Global Flood Defense Systems (GFDS), founded in 2007 due to mass flooding in central England, launched to the international stage 18 months ago – and took over Asia by storm. Today, the business is overwhelmed with export opportunities.
“I’ve been talking to people in the Philippines, Nigeria, Oman and it’s only half past 11”, says Patricia Freshwater, GFDS’ commercial director.
“This interesting journey started from a really small SME that hit the market with its innovation and its thinking very, very early on?, Freshwater tells Real Business. Layered on top of that then, was suddenly this strategic thinking: if we can do this in the UK, why can’t we do this around the world ?
How to turn a micro-business into a global organisation
Businesses tend to grow their market domestically before looking for markets further afield. However, GFDS turned this process on its head. We did it completely the other way round and set up as a global company before we even had one export sale,” said Freshwater.
?GFDS’ success struck the international market when the world needed what we had to offer: we hit a moment in time where there were massive flooding events in Thailand, the Philippines and Australia and we were inundated with inquiries from international marketplaces to talk about our products.
Although inundated with requests from across the globe and having specific ambitions in Australia, GFDS decided to prioritise and focus on Thailand first. As a small organisation you have to prioritise who you can get to quickest?, she says. The Thai market was urgent and critical.
Expanding an SME’s international exports is a tricky business; an important part of GFDS’ plan was to find the most reliable partners abroad.
Finding a partner or distributor abroad
“You can end up being a busy fool if you don’t have a process in place”, advises Freshwater. “Some businesses that approach you may waste your time, research and money.
She gave us a few tips for finding a reliable partner:
- Research your marketplace;
- Don’t rush;
- Be due diligent;
- Put in place a pre-qualification questionnaire;
- Make sure there is some chemistry ;
- It’s not about size; and
- Have terms in place, if a partner does not agree with your terms, simply don’t work with them.
“It is about finding partners with a good synergy and a good understanding intellectually and emotionally on what you can achieve,” she says.
A good partner will also help any business new to the Asian market deal with the overwhelming cultural barriers: Asian traditions, language gaps and different ways of doing business deter many SMEs thinking of exporting. Freshwater dispels these negative rumours, saying ?building friendships with the distributor was not difficult. Socialising outside the boardroom is key; going to dinner and getting on the same wavelength are what she believes key to creating a good business relationship.
Dispelling myths: the risks of exporting to ASEAN
Thailand, a land of bribery, violence and illegal money making schemes” The myths surrounding Thailand – and the ASEAN market in general – are necessarily off-putting for growing businesses that are thinking about export.
UKTI business conferences are flooded with discussion concerning the risks of exporting to south-east Asia, but when asked of the ground risks, Freshwater immediately responds: ?What risks She believes that if a business has a commercial product that they are trying to sell into a company and the price is right and people want it, you can secure yourself from risk.
“If you want to take a risk because you are so desperate for the revenue, that may become a problem. But not as far as the political situation is concerned.
“If you go walking into dodgy areas you take your life into your own hands anyway. You could do that in London.
GFDS is still a young SME – but with a bright future. For continual success, Freshwater concludes: ?We constantly frame our vision of where we are going to be in a year’s time, or in two years’ time. We live and breathe our vision. Everything we do supports that vision, and we are fully aligned to that vision, so we don’t waver and wonder off.