15 Tips for Growing UK Small Business Exports
According to the Office of National Statistics (ONS) 107,700 UK businesses exported goods in 2016 (another 128,900 exported “services” in the same period but we’ll be predominantly focusing on goods exporting for this blog).
The Confederation of British Industry (CBI) state that the Manufacturing sector outperforms every other sector in terms of exports from UK businesses. This sector accounts for 45% (£228.9 billion exports) of UK exports, 57.5% of which are currently to the European Union.
In 2016, there were 4,400 large businesses (those with 250 employees and over) who traded internationally. This figure is over half (52.7%) of the total number of organisations that fall into this size category; there are 8,300 “large” businesses in total in Great Britain. In comparison, only 12.8% of the total number of small-to-medium sized businesses (SMEs), in Great Britain, traded internationally in the same year.
It’s estimated that businesses are 11% more likely to survive if they export. But while SMEs account for approximately 95% of all companies in the UK, it’s a small number that are actually involved in exporting.
When compared to US SMEs at 33%, small-to-medium sized German companies at 20% and Chinese SME sized firms at 60%, it is clear that this nation of traders and our British firms are trailing behind the other economically significant countries.
The reasons for the UK not being as export focused as we could, has been debated many times over with, “risk averse”, “cost concerns”, “lack of qualified international trade professionals”, “no Government support” and a general “lack of market knowledge” all being thrown into the mix. Brexit, of course, is another hot topic too.
But ultimately, UK SMEs are completely in control of their own destiny and our 15 Tips for Growing Small Business Exports can be utilised as a great starting point to develop your own export journey;
1. Research and be Realistic
India and China get a lot of publicity when it comes to potential markets for UK SMEs but these aren’t realistic markets for many (that’s not the case for some specific niche markets though). British firms need to know more about where real opportunities and real customers are. Businesses can benefit from current preferential trading agreements in place with South Korea and South Africa. Latin and South America, East and West Europe, and the small strong markets in Singapore and Taiwan can all be explored too. And don’t forget the Commonwealth.
2. There are Right and Wrong Options When it Comes to International Delivery
You'll need to gain a bit of knowledge on commercial invoices, Incoterms, letters of credit, freight and International Delivery processes. But some third parties (such as us) offer help and advice for free if you ship and export your goods through them.
3. Be Universally Sociable
Social media can have a very positive impact on your international marketing and potential to reach international clients. There is of course a right and wrong way of going about this but LinkedIn, Twitter Instagram present opportunities in their own unique ways.
4. Real Customers Are More Important to You Than “Markets”
It’s not about markets or buzz words; it is about reaching real customers. It doesn’t matter which country (or countries) you choose to export your products to, it simply matters that you have customers there who want/ need your products. Why not ask your UK customers (you may need to be selective of course), social network followers and peers where they sell to in the world, why they have been successful, and what lessons they have learned along the way.
5. Exporting is Great. Or at Least it Can Be
We live in a competitive global world. But many businesses still don’t know the basics of trading internationally or the major opportunities out there. The Department for International Trade is a great place to start and answering a couple of questions on their online Export Journey tool will provide you with a strong starting point (it’ll only take a couple of minutes to form the basis of your new export plan).
6. When a USP is not a USP
Get competitive and work out what makes you the best at what you do. Customers care about product quality, after sales service, good communication and strong supply chains. And your USP in the UK may not be considered one internationally. What’s your other USP for your new international customers?
7. The Best International Customers in Life are Not Free
You’ll likely need to budget for market development. Few things in life are free and gaining international customers can take time and money to acquire. Will you need an additional website for instance to ensure you’re using the correct dialectal, images, contact information etc. to sell to buyers in that country?
8. Don’t Think That Customers Outside the UK Will Automatically be the Same as Your UK based Customers
Buying psychology and behavioural economics changes greatly depending on the country and continent your international customers are based. Whilst it’s true that we’re all only human, marketing and products will be perceived and accepted in various ways across the world. You’ll need to engage with your customers in the most applicable way to them, not you.
9. Keep Things as Simple as Possible
Don’t go after customers in large, complicated, non-transparent markets.
After you’ve done your research, it may be that you’re sending your products straight to your customer. But for some, you will need agents, distributors or local partners. If you need to go down this route then find the good ones. They will save you time, money and headaches.
11. Trade Missions Are Just for the Government Aren’t They?
Business to business trade missions are a great exploratory exercise. Match make to your preferences, wants and needs. Follow up with your findings and start the ball rolling. Governments around the world get involved with trade missions regularly. But do they specifically represent your business or know what your ideal customers look like. Only you can answer this of course but getting out there could be the ticket for some.
12. Ecommerce and Why You Should
The UK currently excels at ecommerce. And for that reason alone, you probably can’t afford to not have at least part of your sales effort online. After all, your competitors do. The EU is the UK's most important destination for the export of small packages at the moment but with the majority of commercial transactions now occurring online and new trade deals likely to be negotiated in the coming months and years, you need to be involved! And as a side note, we can give you access to ecommerce integration courier software to streamline your shipping process.
13. We’re Going to Have to Mention the “B” Word
You didn’t think we could compile a list like this and not mention Brexit did you? It’s happened. We’re leaving. Regardless of which side of the fence you sit, it’s likely that new international trade agreements will form over the coming months and years. Keep up to date with (real) news because even if you’re not interested in the political commentary, you’ll want to be at the front of the queue, ahead of your UK competitors, when it comes to entering those new markets and opportunities. For example, a deal with America has been highlighted as an opportunity – go and smash it.
14. Play the Long Game
Tip 14 has nothing to do with Gary Megson. It relates to good customers being hard to find. As Einstein said, “You have to learn the rules of the game. And then you have to play better than anyone else”. But this can take time and you may need to commit to being in for the long haul.
15. Get Involved Where You Can
It’s no coincidence of course that we’ve written this blog, exactly 12 months before the United Kingdom leaves the European Union. Government surveys and questionnaires are being circulated at an impressive rate at the moment. Please complete any that you’re asked to. The business community needs to do all it can to provide evidence, insight and acumen that the Government cannot gather on its own.
"Buying psychology and behavioural economics changes greatly depending on the country and continent your international customers are based. Whilst it’s true that we’re all only human, marketing and products will be perceived and accepted in various ways across the world. You’ll need to engage with your customers in the most applicable way to them, not you."