First Steps to Exporting

1. Assess Your Export Potential

Before committing resources to exporting, you should assess your business's exporting potential.

1.1 Assess the suitability of your goods and services for export.

• Consider whether your product or service offers enough of a profit margin to absorb the costs of being exported.
• Identify foreign laws and standards which will affect your products and services.
• You might need to modify your products to ensure they conform to the cultural norms of the target market.
• If you want intellectual property (IP) protection overseas, you should make an application in each country for which you want protection. Contact the UK Patent Office. You can apply for Europe-wide protection through the World Intellectual Property Organisation.

1.2 Analyse the benefits exporting could bring.

• Your turnover and profit can be increased.
• Overseas competition could give you a competitive edge over rivals at home.
• Falls in demand in your home market can be offset by overseas sales.

1.3 Identify the possible pitfalls of exporting.

• Taking your eye off your home market.
• Getting paid by overseas customers can be difficult. Get the terms of your sales right to make sure you get paid on time.
• You may have to travel abroad or spend months negotiating a deal, so allocate sufficient company time to exporting.
• Many would-be exporters fail because they are unaware of the language, culture and legal systems of the target country.
• Ensure responsibility for delivery and collection is clearly defined with your foreign customers (see 4.1).
• Failing to maintain regular contact with your sales agent or import distributor.

1.4 Identify the resources you will need for trading abroad.

• Unless you appoint a sales agent, your sales staff will need to have the language skills of your target market.
• Identify the financial reserves needed to support exporting activity such as product development and marketing.
• Ensure your business has the administrative capacity to handle the documentary and legal obligations.
• Ensure your business has an adequate knowledge-pool of foreign regulations, standards and cultural preferences.
• Plan the expansion abroad within the framework of your business plan (see 3.1).