In the lead up to Small Business Saturday (taking place on the 1st December) we are exploring various topics through several blog posts – this week we are focusing on all things Export. Exporting your business can seem like a daunting task but as long as you fully prepare, it can be a very rewarding and beneficial decision.
Here are 5 steps to starting your exporting journey, thanks to the Department of International Trade:
Research your market
Your first step may sound obvious but you will need to carry out a good deal of research – both on which markets you should be entering and the best entry points to those specific markets. You will also need to research how to position your product or service within this market, the overall market data should help to form your plans, it’s important to know whether there is a high demand or too much competition. If you enter a new market without fully understanding it, this could cost your business a lot of unnecessary time and finance.
Some of the key questions you may want to ask are:
- what is the market potential?
- what are the barriers to entry?
- who are my competitors?
- who are my customers?
- what are the best routes to market?
Doing business with integrity
Awareness of integrity concerning bribery, corruption, human rights, child labour and gender equality are important to consider, especially in a high risk market. Bribery is illegal but it can still appear in some countries, it maintains a corrupt and hostile business environment while exposing your business to lots of risks.
The Business Integrity Initiative is a new support service which is funded by the UK government, this helps businesses doing business in Africa and Asia and provides specialist anti-corruption knowledge for SME’s. This can include risk mitigation, compliance with the law and collective action support.
Know the relevant legislation
The UK Bribery Act applies to UK companies operating inside and outside of the UK, your company and/or partners could be prosecuted if there is evidence of receiving or giving a bribe. This act has also created a new offence which is ‘failure to prevent bribery’ by the business or anyone associated. As a defense to this offence, you will need to have procedures in place to protect your business, such as clear policies and/or staff training. Please visit the DIT website linked below for further information and links to find out more about the UK Bribery Act and how to prevent bribery itself.
You might also need to know about anti-corruption legislation in countries such as the US. You could be liable under the US Foreign Corrupt Practice Act (FCPA) for bribery carried out in another country. This is similar to the Bribery Act with the exceptions that the facilitation of payments might not be considered an offence, their fines and penalties will have some upper limits and the FCPA only covers giving bribes.
Know your customers and partners
Any information about your current customers will be key to understanding your potential customers, statistics and data on your markets population size, age and other aspects will help you to define a clear idea of who your audience will be.
You will need to know who is going to purchase your product or service, whether your customers will be an intermediary or end consumer and what will affect customer behaviour. You can easily find out customer preferences, behaviour and motivations by having discussions at events, conducting surveys or selling small quantities of a product as a test.
There are useful resources online that you can use to find information such as local company registration services similar to Companies House within the UK, social networks and search engines, blacklists published by government authorities and others.
It’s also important to gather information to allow you to map your supply chain, this can be used as a tool to manage risk and achieve a commercial advantage. This can help you to decide on a good price point, calculate impacts of price mark ups during the stages of production and distribution and to spot signs of bribery or fraud.
Make an export plan
Your export plan will be a business plan for selling overseas, this should include the decisions you have made based on market research, your main objectives and how you plan to achieve those objectives. A good plan will ensure you have thought about every possibility and it will show that you have chosen a logical path towards your targets. An export plan can be seen as a tool to show banks, investors or partners that you are serious and have a realistic approach to your business goals.
Another aspect of your export plan should include planning for risk prevention involving risks involving unethical or illegal practises, such as corruption, bribery, fraud, child labour or modern slavery, either within your company or throughout your supply chain.
As previously discussed, you should operate in line with all relevant legislation or government frameworks and make sure to produce clear policies and include staff training, in order to protect your business from any such risks. This can include a code of conduct, due diligence, internal auditing and staff training. Companies often opt to approach lawyers or analysts in order to produce these documents.
To summarise, your export plan should include:
- an explanation of why you want to export including the benefits
- your product or service offering and what makes you different from the competition
- your target markets and the reasons for choosing them
- any changes you need to make to your product or service for the new market/s
- how you intend to protect your intellectual property
- how you’ll market your product
- how you intend to resource your plan including staffing and finance
- your operating model or route to market
- operational information including transport, distribution, customs and licences
- targets and how you will measure them
To find out more about how you could start preparing to export your business and to read further steps in this process, please visit the website of the Department of International Trade
If you’d like to speak to someone who can put you in touch with the relevant people in regards to export or any other area of business support – please feel free to get in touch with the Black Country Growth Hub team.
(Information taken from the website of the Department of International trade)