Research has shown that businesses are more than ten per cent more likely to survive if they export. As the UK faces the prospect of a deeper recession, expanding abroad provides British businesses with a way to generate growth, spread their risk, and develop new products to fit new markets.
The UK has a relatively large domestic market, but constitutes just 2.3 per cent of global gross domestic product (GDP). This means that UK companies that only sell within our borders are missing out on over 97% of potential growth areas.
Exporting to new regions not only offers a large potential new source of customers, but also pushes companies to adapt and innovate to better serve customers in those markets, which makes companies more agile and able to compete back home. Innovation does not come by accident, it is driven by the needs of customers and companies pushing the boundaries to find the right market fit.
Critically, whilst we do live in a globalised world, recessions also tend to be more locally focused and so by exporting to w wider array of countries, businesses are reducing their risk profile. Today, the UK may be fumbling along with stagnant growth whilst the US economy soars, but in the future that may reverse, or it may be that Germany or France or India are the countries where the largest growth is seen. Companies that are able to sell to all of these different economies are better able to manage any single economic slide than those which rely on just the home market. Indeed, research carried out by HSBC has shown that companies who export are significantly more resilient to downturns in the economy and grow more rapidly than those trading domestically.
What are the steps to start exporting?
Exporting your company’s products or services to a new country is not as simple as adding international shipping to your current website and accepting payment in Euros and US dollars. However,
Research your target market
Trying to export to the world overnight is an overwhelming prospect with more red tape than most businesses can manage with even an army of lawyers and accountants. Instead, it is better to focus on new markets one at a time, and thoroughly research your competition, niche, and any legal, financial, or cultural hurdles that you might face.
Identify the best sales channels
In some countries, you will find that physical representation on the ground may be required, which might mean working with local distributors or representatives to market your product. Elsewhere, you might find that an online direct-to-consumer approach will work better, so that if you are selling to France, for example, setting up a French website for the local market may be the best option.
Work out how you will get paid
It is getting easier to send and receive payments from abroad with various banking providers now offering low cost or free foreign currency accounts or commission-free currency conversion. However, it is important that you have the payment processes set up before attempting to make sales,
Market locally
You may have created a brand in the UK that has become a household name, but in most cases when you start to export you must consider your brand is starting from scratch in each new territory. To find the right customers for your products or services, it is useful to work with local marketing firms that can translate the benefits of what you are offering to the local market. Online, it is also worthwhile employing local developers and marketers, so if you are exporting to France that will mean a new website created specifically for the local market, and a French SEO company directed to promote it to the right digital audience.
Be prepared to adapt
Few companies find that they can simply export their current products or services to new markets without any changes whatsoever. Language barriers often need to be overcome, but more than that – the legal, financial, and cultural differences between countries will also mean that other changes will need to be made to create a successful market fit. Luckily, however, many of these adaptations can also improve the business back home. Innovation is the key to continued success and growth.