From knowing your market to managing currency volatility, here’s how these businesses made it overseas
Real Business conducted a survey in partnership with WorldFirst to find out what our small business readers see as the main barriers to entry when it comes to exporting. In part one of our video series, we explore what the main challenges are for UK SMEs when trading overseas, how to identify the right markets for your business and how to get started
Off the back of this survey, we held a roundtable with exporting experts and small businesses who have already begun their overseas journeys. Watch the full video here:
- Parveen Thornhill, head of London & devolved administrations, Department for International Trade
- Julianne Ponan, founder, Creative Nature
- Helen Wang, founder, Abakus Foods
- Karl Fletcher, head of business development, Seawater Greenhouse
- Ben Knightley, co-founder, Croud
- Richard Valtr, founder, Mews
- Oliver Whelan, Head of Corporate Acquisition, WorldFirst.
The initial barriers differ from business to business – but one thing we uncovered in our survey is that many struggle in selecting a new target market.
For example, Fletcher of Seawater Greenhouse found that starting up his business in Somaliland turned out to be a surprisingly big success, but he wouldn’t necessarily have anticipated this at the start of his journey.
To conquer this market, Fletcher says it was crucial to find the right commercial partner early on who knew the market.
Ponan echoed this. At first, she was hesitant to export and wanted to find a firm foothold in the UK, and even when the business did dip a toe in the water their first adviser didn’t work out. It was once they decided to work with the DIT that things started to take off.
Thornhill explained that, no matter what your exporting anxieties, the DIT has the expertise to understand your sector and your business whether its psychological barriers, partners, IP, financial concerns etc. The DIT has over 35 trade advisers, often recruited from the private sector on the basis of their exporting experience – they know their stuff.
Talk then turned to the specifics such as juggling FX. According to Whelan, the ultimate goal is to invoice in your own currency – take on the cost in pounds, pay in pounds and remove the exposure to risk. However, nine out of ten customers would rather pay in their local currency.
Of course, the panel explained, currency fluctuations can be an opportunity too – but it needs to be factored into the product’s price point in that market.
Brexit naturally adds to the confusion here, and can add in unexpected costs:
“Our main nervousness was not understanding free movement of people. We have a lot of overseas staff centralised in London,” explained Knightley.
“With exchange rates, we won in the US and Sydney…we did well in currency but lost in terms of staff costs.”
Choose your own adventure with exporting
Everyone’s exporting story is different, but the panel encouraged businesses to learn as quickly as they can, and remain open.
In their parting words of advice, the group had this to say:
“Don’t be afraid in being adventurous – our project in Somaliland came off the back of the project in Australia…remaining flexible is really important, don’t be scared to take risks, but know things that are non-negotiable,” said Fletcher.
Ponan encourages all business owners to do their research: “You don’t want a shipment that’s stuck in customs that you can’t get out. Know who the gatekeepers are!”
Knightley suggested that making friends first is the way to go – get to know someone who understands the market, how it operates, the logistics and the legalities.
It’s also important to remember you aren’t alone; if you don’t know someone in the market, Whelan suggested seeking out consulting companies and distributors.
Wang and Valtr stressed that businesses should treat each new market as an individual – no two are the same. Valtr encouraged businesses to spend as much time as possible visiting the markets.
Lastly, Thornhill agreed that immersing yourself in the market you are targeting is key. “Do a lot locally, speak to someone to speed up the process, and have a realistic plan,” she said.