International Trade

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SMEs should not be daunted by export

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Don’t be misled by the sceptics – British manufacturing is not dead. We have a fantastic wealth of manufacturing expertise here in the UK, second to none, and let no-one tell you otherwise. I firmly believe that this country has some of the best engineering talent in the world, even including Germany.

From Isambard Kingdom Brunel’s Great Western Railway, bridges and steamships to Sir Frank Whittle’s jet engine and Formula One racing cars seen today, UK engineering and manufacturing has a lot to be proud of. However, globalisation has brought enormous challenges.

When my grandfather founded his company in his garden shed in 1969, all of his customers were in the UK and that remained the case for many decades. Now, almost all of our customers are abroad. 

So, while the prospect of chasing customers around the world is daunting, there are opportunities out there and British companies need to seize them. Exporting is the key to keeping the flame of innovation alive in the UK, and to nurturing the skills and expertise at the heart of this nation’s international reputation for engineering excellence.

British skills are sought after and we have to remember that, continue to promote them, and build on that foundation. But before breaking into a new export market there are several important points to consider:

Cost base

The first thing manufacturers have to do is get the cost base right. Simply trying to buy business will end in failure: you need to have a robust grip on your internal cost base from the outset.

Differentiator

It is especially important in emerging markets to know exactly what your differentiator is from competitors’ products – because it almost certainly won’t be price. Your differentiator could be quality, or flexibility, shorter lead times or the ability to provide a truly bespoke service, from initial design right through to production and testing, for customers.

Know your market

This is absolutely key anywhere, but especially in territories and cultures which are unfamiliar. Be wary of unexpected pitfalls – and there will be plenty. Just think of the Royal Mail’s abandoned re-brand as ‘Consignia’ – which is very close to the Spanish word for ‘left luggage’. You don’t want to go there, ever. Use the help available from the UKTI to research the new territory. Local chambers of trade also organise trade missions and insight.

Expect the world to change

You may be able to happily export to a new market for a long time; and if so, good for you. It’s more likely if you have a strong differentiator. But conditions change and you may come under pressure to find a local supply base, in effect ‘exporting’ your expertise.

There is no doubt we are in exciting times and as a nation we have strong foundations on which we can continue to build. Certainly, as a manufacturer, Britain has a fantastic reputation across the globe and if export is the key to continued success it is therefore vital that businesses capitalise on the strength of what is essentially brand GB.

John Nollett is Managing Director of Pailton Engineering and board member of Coventry and Warwickshire Chamber of Commerce

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