Small companies sharing a big market

Nov 25 2009 by Andrew Mernin, The Journal

You don't have to be a mammoth corporation with a bottomless pit of capital to make it big overseas. Andrew Mernin finds out how a growing band of the region’s small businesses have become exporters on a shoestring budget.

A HORSE called Tiffany with a bad back was the unlikely catalyst for the creation of a globally successful firm in a tiny village in Teesdale.

Tiffany’s owner Les Spark, an endurance riding enthusiast, set about designing a saddle which would allow him to ride the horse without being thrown to the ground in anger at her own discomfort. And so the flexible, and apparently ultra-comfortable, Free N Easy saddle was born.

Seventeen years later, the saddle is sold in 20 countries across five continents and has given the village of Low Selset, near Barnard Castle, its own international success story.

This month Mr Spark shared his exporting experiences when he met with budding entrepreneurs at an event in Newcastle’s Baltic Centre for Contemporary Art.

Event organiser Enterprise UK brought together a string of small but successful exporters to uncover the secret of exporting without involving heavy investment.

Mr Spark explained why export markets are not reserved for large, blue chip players with budgets to burn and multi-million-pound expansion strategies.

“We are a very small company and we have exported on a shoestring,” he said.

However, he also explained why the path to global domination is far from straightforward.

“We had someone go on to our website from America and said ‘we like what you are doing’. We Googled her and decided she was our target market, so we went across to see her. We got on the airplane and went to America.

“There’s a misconception that if you invent a new mousetrap, the world will beat a path to your door – but that’s absolute rubbish. That’s why the advertising industry exists.

“We have had to provide extreme customer support, which we can now do on the internet. It’s a high value item [from around £2,000 to buy] so that means the customer doesn’t buy it without thinking very carefully about it.

“That means there needs to be a lot of contact with us to have comfort when buying something as expensive as that. We can afford to give people that personal attention as one sale gives us a lot of money.”

New Zealand, Uruguay and Japan are just some of the countries the firm, which employs just five people, has sold to. But it has learned the hard way about how to handle the risks and unseen pitfalls of going global.

At one stage it was approached by a German and an American party who both saw the commercial potential of the product in their respective countries.

Mr Spark said: “By about 2000 we got carried away and we were approached from America from someone who wanted to sell it across America and another person who wanted to sell it in Germany.

“Our mistake was that we had priced for direct sales. We didn’t add the margin for selling it through agents.

2003 was our biggest year of overseas sales – turnover was around £155,000 and half of our production went to the US that year but we made big losses. We were very vulnerable to currency fluctuations.”

Ultimately the company parted company with the two agents and it is now flourishing independently on the world’s stage.

“We don’t have a big enough market in the UK. There are much bigger markets in America and France.

“We have gone out and focused on our niche market. We have to try and become familiar faces to the French and German riders. They are very conservative about buying from abroad.

“We go to trade shows and racing events in France and little by little this is now growing and that is how we are going to continue. We think we are on the way to being a successful small business selling overseas.”