Ten key steps to successful exporting

Jun 27 2006 By Evening Gazette

Although your business may have an established UK market, there's often no reason why it couldn't successfully compete overseas too, growing your revenue and profit.

But before you start exporting you need to have sound knowledge of your would-be markets.

You also need to consider whether your products are right for each target market and whether you have the necessary resources.

Planning to export?

Before you commit to exporting you need to honestly assess your export potential - both in terms of the readiness of your business and of your product or service.

It's essential to carry out detailed market research to identify and evaluate the target market.

The Overseas Market Introduction Service (OMIS) provides focused business advice and helps you assess whether there is a market for your goods.

After completing your market research, you can draw up an export plan defining how you will enter the new market.

Consider whether you have:

* A marketing strategy that incorporates international trade development and the necessary financial resources.

* The right people to develop the new export markets and adequate knowledge of the requirements of your chosen market - eg modifying packaging to meet local regulations and standards.

* An understanding of export payment mechanisms and export finance.

Selling and distribution in overseas markets

There are a number of elements you need to consider to sell successfully overseas. How you organise your sales presence in export markets is one of the key decisions.

Depending on your product, you may be able to sell directly. For example, you might be able to sell over the Internet or by exhibiting at local trade shows.

Many businesses look for a partner who already understands the local market. For example:

* You can sell to a distributor who then sells your products locally.

* You can use a sales agent who sells products on your behalf, or puts you into contact with potential customers on a commission basis.

* You can enter into a joint venture with a local business. This gives you a share of the management and profits of the joint venture, but is a more complicated and expensive option.

* If you want complete control over sales, you can set up your own local office.

Marketing your product or service overseas

To succeed, your marketing strategy will need to be tailored to each target market.

You'll need to appreciate the traditions, culture and legislation of the countries you are trading with to exploit your exporting efforts.

Sales promotion overseas

Customisation of your marketing activities is essential if there are cultural differences affecting the consumption of your product.

You should consider:

* Using different media. TV viewers in one country may belong to a particular socio-economic group, while in others TV ownership is far more widespread.

* Changing symbols. For example, you may need to respect different standards of dress in promotional activities in some countries.

* Changing the market proposition. For example, bicycles are presented as a leisure item in one country, but as essential vehicles elsewhere.

Your legal obligations as an exporter

You'll need to familiarise yourself with the VAT rules administered by HM Revenue & Customs (HMRC).

In most cases, exports will be zero-rated for VAT although there are exceptions.

Details of any exports you make must be entered on your VAT return. If you have a high level of exports to European Union (EU) member states, you may have to submit more detailed declarations in an Intrastat return.

For exports outside the EU you must report sales to HMRC electronically using the New Export System (NES) or using the paper-copy single administrative document (SAD). Shipments below a certain value can be reported via a standard shipping note (SSN).

Regardless of your exporting experience, Business Link provides access to a team of UK Trade & Investment Advisers, who can provide expert, impartial and reliable business assistance to enable you to realise your international trade ambitions.

Call Business Link now on 0845 600 9006 or email info@tees.businesslink.co.uk or alternatively visit www.businesslink.gov.uk to see how you can get the most from your business.

1. Research your market - does your prospective foreign customer need what you are selling at the price that will yield you a profit? What is the competition and how will they react?

2. Implement an export strategy and review your capabilities - ask yourself: what would my business gain from exporting? Construct an export plan - define how you will enter the foreign market.

3. Finalise human resources and marketing strategy and allocate an adequate budget to cover export start-up costs.

4. Choose your sales presence - establish whether you need a direct sales operation. Or is an agent or distributor more effective? How will you manage your overseas sales presence?

5. Promote your product - how are you going to market and sell your product?

6. Customise marketing to the target country.

7. Get the legal side right - contact HM Revenue & Customs to clarify requirements. Make sure your reporting practices are watertight.

8. Get paid on time - ensure your cashflow will remain at a safe level. Guarantee sufficient credit for your future sales. Take out insurance cover if necessary.

9. Choose your distribution methods - consider the implications of selling over long distances and across national frontiers. Transport goods effectively - assess and choose the most effective transport method and make sure the goods are insured by you or the importer.

10. After-sales policy - regularly liaise with customers, export agents and banks. Monitor political unrest or other adverse conditions in the country of destination. Manage regular servicing and warranty claims.