Most small businesses have no interest in exporting. With the world market becoming more and more accessible, however, you cannot afford to ignore it. I am not suggesting that you should look at exporting as soon as you start your business, rather that there may be opportunities for you to sell your products or services abroad.In my own business, with the broadening of the consultancy market via the Internet I have a number of clients across the world. Some of these I have met personally and with others our only form of communication has been by telephone and e-mail. In actual fact, my ‘export’ sales now form a significant part of my business.
Why Should You Consider Exporting?
There can be no doubt that in trading terms the world is getting smaller. Communication techniques have become more sophisticated, travel costs have fallen and substantially more trade information is available to break down the previous physical barriers involved with exporting. Whilst the vast majority of export sales from the UK are achieved by large companies there are still many opportunities for small businesses.
You need only consider the annual winners of the Queen’s Award for Export. Surprisingly, most of the firms who win this award are small. Small businesses can also offer important competitive advantages in the export market. Larger firms tend to be more bureaucratic and less adaptable to changing market conditions. Small businesses, however,
tend to be more creative and more adaptable with the ability to respond quickly to the demands of their customers.
As you would expect there are numerous advantages and disadvantages to exporting. Each business will be different in terms of the ease with which exporting can be introduced and the difficulties that will be faced. Some of the benefits and disadvantages that were mentioned in research conducted amongst firms that export are given below.
Benefits Of Exporting
- Potential for increased profitability through additional sales
- Creation of new markets and new customers
- Less dependence on the ‘home’ market
- Enhancement of the business’s reputation
- Increase in production leading to economies of scale
- Products that are saturated in the ‘home’ market are given a new outlet.
Disadvantages Of Exporting
- Financial risks due to currency fluctuations
- Drain on existing business resources
- Difficulties involved in dealing with ‘unknown’ third parties
- Potential of neglecting the ‘home’ market
- Language barriers
- Unrealistic expectations in terms of sales volumes
- Risks with regard to credit controls and bad debts
- Excessive costs in converting existing products to meet the demands of the export market.
Identifying Export Opportunities
Only you can decide whether exporting is right for your business. Once you have made the decision it is important that you take adequate time to identify the market, or markets, into which you propose to export.
Where Can You Export To?
To some extent this may depend on your products or services. Provided there is a demand, you can sell your products or services anywhere in the world. That assumes that there are no restrictions, for example, governmental or religious, that would prohibit you from exporting into a country.
There are a number of organisations that can help you with sourcing an export market including:
- The Department of Trade and Industry
- British Chambers of Commerce
- British Embassies
- The British Exporters Association
- Export Market Information Centre.
The Department Of Trade And Industry (Dti)
Through Trade Partners UK the Dti offers a wide range of services for businesses seeking to export. These fall under six main headings:
- advice on the processes involved with exporting
- advice and assistance with market research
- assistance with export promotion
- help with identifying appropriate contacts abroad
- guidance on countering problems with the language barrier
- provision of potential leads for export opportunities.
British Chambers Of Commerce
The Chambers of Commerce are extremely active in assisting their members with export opportunities. They organise a number of trade missions and fairs each year, many in conjunction with other trade associations. In some circumstances they also offer a subsidy to the costs involved with attending such functions.