Be a success in the export market

Sep 30 2009 by Andrew Mernin, The Journal

The Journal has teamed up with the North East Chamber of Commerce to launch the Go Global campaign which aims to encourage more North East firms to tap into lucrative international opportunities. Andrew Mernin talks to the export experts for some seasoned advice on success overseas.

THE rewards of making it big overseas can be huge – just ask any member of the North East’s army of businesses who have battled their way through the minefield of foreign bureaucracy to gain a foothold in a new market.

However, the process of becoming a first-time exporter is fraught with danger and your every step towards success is surrounded by potential pitfalls.

For Stephen Muir, an international trade adviser at the North East Chamber of Commerce (NECC), the biggest sticking point for Brit businesses abroad is in receiving payment for their wares.

He says: “Getting paid and payment terms are what most people are concerned about. It’s very difficult to come to an agreement with the customer as to how they are going to pay.”

Mr Muir says the process of delivering your goods and securing payment for them can be a tough balancing act, with a range of avenues available.

Letters of credit or special banking arrangements are often used to lessen risk for both parties, while there are a multitude of delivery options.

“The main thing is trying to come to some sort of arrangement with the customer with what level of risk you want to take,” he says.

There are a number of delivery terms which vary in the cost and responsibility your business has to take on board.

For example, at the top-end of the scale you may be asked to pick up the tab for the goods to be delivered all the way to your customer’s warehouse and the duty in that particular market.

Fortunately, NECC, UK Trade and Investment (UKTI) and the global network of British embassies are all at hand to assist you in overcoming the difficulties of joining the exports club.

Here Mr Muir, who spends his days helping North East firms overcome the problems of breaking into new international markets, gives his top tips on becoming a successful exporter:

1. Research your market well and plan your market entry

2. Ensure you understand any cultural/language difficulties & barriers and how you will over come them.

3. Export should be part of the business plan and you should formulate an export strategy as to how you will break into that market.

4. Allocate sufficient budget to the export strategy, you may need to visit the market, develop promotional material, develop skills and knowledge etc. So be aware of what costs are involved.

5. Know how you are going to get paid and agree the correct payment terms.

6. Choose the correct Incoterm (International Commercial Term) dictate the point at which the transfer of responsibility for the shipment takes place).

7. Classify your goods correctly – identify the correct commodity code (this is used to determine what the rate of import duty will be for your customer, if applicable).

8. Use the right mode of transport – take control of your supply chain

9. Don’t initially spread your net too wide – concentrate on a couple of markets, make a hit, learn and then move on to more complex markets.

10. Don’t make promises you cannot keep – you need to provide excellent customer service.

11. Communicate with your customer – listen to them and know what they want.

12. Invest in your workforce – ensure they have the right skills and training to meet international customers’ demands.

13. Getting it right first time saves time and money.

14. If in doubt ask for advice – contact the NECC (over 100 years combined experience within the team, use it!).

Getting paid and payment terms are what most people are concerned about