Government minister Liam Fox recently crossed small business owners by suggesting that UK entrepreneurs are letting the country down by not gearing up to exploit post-Brexit opportunities.
However inflammatory his remarks, the Federation of Small Business has found only one in five small UK firms exports, although another 20% would consider it. Figures suggest the UK substantially lags behind its European counterparts in taking advantage of international opportunities, with just 31% of online business activity looking abroad in the United Kingdom (versus 62% in Germany).
Exploring international markets can seem like a big step, but there is plenty of help and advice available. Here, experts and small business owners share their tips.
Get connected
In this digital age it’s never been easier to explore a new market and start networking before taking the plunge.
“The global economy has never been more interconnected, with pools of opportunity springing up everywhere,” notes Josh Graff, LinkedIn’s UK manager. “Do your research: if you want to target the software sector, for example, a good starting point is to look where software engineers are located. Use these cues to refine your prospecting strategy.”
There are various channels that can help you get started – social media platforms can be a good place to start, and there are other companies that can provide the necessary link to international customers.
Online retailer Trouva provides international exposure for independent UK lifestyle boutiques that trade primarily through physical stores. It helps them do business online with countries as far flung as the US and Australia. These are sales that entrepreneurs might have otherwise missed out on because their individual product ranges are too small, they don’t supply enough volume to warrant discounts from distributors, or because of the logistical implications of managing returns.“Economies of scale are essential to make exports viable,” Alex Loizou, co-founder of Trouva, says.
Pick markets wisely
For those companies that are looking to export, Nigel Wilcock, executive director at the Institute for Economic Development, says entrepreneurs need to be realistic about the opportunity-cost ratio.
In some cases, the investment may not be worth it. “The large amount of time and preparation for an uncertain return may be too great for some business owners,” he says. For this reason, it’s important to test markets on a small scale beforehand, and look out for special rules or requirements that might apply in each country.
Think about distance, too, Wilcock says. “One per cent of the China market may seem attractive, but 10% of the market in Ireland may be a better target as it is close to home and relatively easy to access.”
Invest time
Getting your feet under the table in new territory takes patience. Muir Macdonald, managing director of BMT Defence Services, winner of the Queen’s Award for Enterprise in 2013, says it’s important to establish a strong reputation in your home market first.
The company designs and engineers military ships and submarines. “Although we’re a small company in our sector, our unique expertise and experience is very exportable,” Macdonald says. “But it’s not easy.”
BMT Defence Services decided to look abroad for the sake of its bottom line, and to give employees a wider variety of excitement, experience and challenge. “This makes the company stronger with an even richer offering for the benefit of our clients – a virtuous circle,” Macdonald says.
It has had to invest years in building relationships, but playing the long game has paid dividends. The company is currently collaborating on a major Royal Norwegian Navy vessel, being built by Korean partners, following a BMT Defence Services design – a project bringing together three nations and cultures.
Share the load
Sometimes export opportunities arise by chance. This was the case for Advanced Chemical Etching (ACE) in the West Midlands, which produces precision metal components for the automotive, aerospace, F1, medical and high-value engineering sectors.
The business, which is 16 years old, fell into exporting after an old contact suggested there may be opportunities in Ireland and in the US. International sales now account for 35% of total turnover (up 7% in 2016). But ACE didn’t go it alone.
The UKTI (now replaced by the Department for International Trade) helped subsidise early exhibitions, which helped the company get its offerings in front of new audiences and prospects. It now funds the trips itself, and has exhibited in France, Germany, Holland, Ireland, South Africa and the US over the last five years. “There’s nothing like going over to the target country, getting to know what it is like and meeting potential clients face to face,” says director Chris Ball.
Today, ACE uses local agents to do business. “Having an expert on the ground is a fantastic way of securing and converting new opportunities, Ball notes. “As long as you’re prepared to support them technically, with marketing and regular visits.”
Lean on couriers
In other circumstances, speed is everything. Rachael’s Kitchen supplies branded and personalised cupcakes. Despite their short shelf-life, it too has a thriving export business, delivering across Europe since 2013. Today companies from all over the world use the cakes to market to other local businesses.
Founder Rachael Halstead says she uses social platforms and Google AdWords campaigns for international promotion, logistics companies to take care of the practical side, and modern e-commerce platforms or clearing banks to process payments in different currencies.
The fact that the products are fresh is no barrier to exporting today, she says. “The courier networks are a great source of knowledge on the legalities of what can be sent, and can offer guidance on excise duties. What’s more, services are improving all the time: orders leaving us at 6pm can arrive with customers by 1pm the next day in most countries,” Halstead says.
Help may be closer than you think
Finally, don’t assume that all government help is accessed via London. When Powys-based manufacturing firm Zip-Clip saw an opportunity to export, it got help from the Welsh government.
The company, which has been trading since 2004, makes high-quality wire suspension systems that speed up the installation of electrical, mechanical and heating, ventilation and air conditioning services. It was the 2008 financial crisis that pushed the business to look for opportunities overseas.
The Welsh government helped organise initial desk research, partially funded the company’s first trade mission to Australia, put it in contact with consulates and embassies all over the world, and most recently, agreed to fund the construction of a huge new site.
“In 12 years, we have built our business from a fledgling idea to a global supplier operating in nearly 30 countries – and we’re continuing to grow,” says CEO Steve Goldsworthy. “We wouldn’t be where we are today without the support of the Welsh government.”
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