Foreign exchange made simple
Exporting can come with a variety of challenges – whether that’s a language barrier or cultural obstacles to navigate. We take a quick look at the risks of working in a foreign currency – and how you can manage them.
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Mike Josypenko, helpline and special projects director at the Institute of Export, shares his wisdom, answering your most common export questions – from cultural barriers to issues around company size.
Export advisers often say a company should be established in its home market before starting to export, but that doesn’t always apply. Some companies may be suited to exporting from an early stage – their products or services may even be more suited to overseas markets.
Any company can sell internationally, but to go out and actively look for export business you need to have a certain level of resource and commitment; you will need to be able to allocate time to the project and have the necessary budget. Remember that breaking into overseas markets can take two to three years.
The range of products that can be sold overseas may surprise you – if somebody wants to buy your product at a suitable price, you have a market opportunity. The desirability of your product may be based on its appearance, design, branding, technical features or effectiveness. Or you may offer a price advantage, an ability to supply more reliably, or your service or after-sales care may be better. Some products – especially in certain consumer markets – appeal because of the ‘made in Britain’ tag. One tip – serving an existing need is often more straightforward than trying to generate demand for a completely new product.
Western European markets make good starter markets for new UK exporters. They offer relatively straightforward sales prospects, with low payment risk, simple transport, and no customs or duty issues.
Brazil, Russia, India, China, and other developing markets present great opportunities, and many businesses are tempted by them, but trading there can be more complex. Although these markets can be profitable, breaking into them requires time, resources, commitment and expertise. Consider the risks and likely costs carefully.
Do not assume a common language makes a market easier to enter. Companies taking part in exhibitions in the USA often comment on the friendliness of visitors, but the US is one of the toughest overseas markets. Equally, language barriers can be overcome. Don’t overlook a promising market because of fear over cultural factors.
The internet can be an important factor for exporters, especially companies that sell direct to consumers. The internet can also be a major element in a company’s marketing mix, helping to develop brand awareness to business or consumer audiences.
Whether a website is used for transactional purposes or more as a marketing tool, it is vital that it is optimised for purpose. Design and content are important, but also consider how the site will attract visitors through effective search optimisation.
Mike Josypenko is Director of Special Projects at the Institute of Export, a professional trade body representing international trade.
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