Once the domestic market has been cracked, the search for new opportunities overseas begins – and with it a host of previously un-encountered obstacles.
The UK has a long track record of being successful exporters of goods. Whether it is engines, tea or financial services – overseas trading has steadily increased in recent years.
Figures from HM Revenue & Customs shows that the value of UK trade increased for both EU imports and exports during September, with exporting up by £800 million on August totals and £200 million on the same period in 2012.
However, the £2.8 billion that Britain has climbed on the import and export front represents an increase of 42.1 percent in the trade gap (difference between UK imports from, and exports to the EU) when compared to August 2013. The trade gap is now £6.8 billion, the largest on record.
The UK has always had to import more than it exports to support itself when it comes to food, fuel and even skilled people. But there are a host of British businesses which are now taking activities beyond the confines of a cosy domestic scene and out into the global marketplace.
For Electronic Temperature Instruments, a manufacturer of digital thermometers that test temperatures in products ranging from oil tankers to Formula 1 racing cars, the business had got all it was going to get at home and needed to look abroad.
David Carter, head of quality and systems at the business, says that there is a time when you believe that everyone in the UK who wants what you make has got one, and after that you have to spread your wings.
‘We had already had approaches from around the world from people who had seen our products, so that encouraged us to look elsewhere,’ he explains.
‘We didn’t really have anyone on board to lead it so it’s been a bit of a learning curve – a self-taught aspect of the job.’
The business started trading in 1983 in a domestic kitchen and has since become a £9 million turnover business. This has been driven by international sales growing from 27 per cent of company turnover to 45 per cent in the last six years.
With its export efforts taking it to 80 countries, the company has made sure it employs Spanish, French, Chinese and even Lithuanian staff to assist with translation.
‘It is a great hope to us and our foreign distributors like it,’ Carter explains. ‘Our products are sometimes fairly technical and if you have a good grasp of a language it helps – rather than just using something like Google translate.’
The British-made approach that Electronic Temperature Instruments has adopted serves it well when addressing a worldwide audience, so much so that an Indian distributor, which had the option to put their own name on the product, preferred to keep it British.
Carter’s top tips for exporting is simple: understand the culture you are dealing with. ‘There are instances where some countries are not as affluent as ours,’ he says.
More on businesses going international:
- Open for export: UK businesses looking overseas
- Davor Hebel on going global: It’s not just for big business
- Top five tips for international mobile companies entering the US
Another business which has found looking to overseas markets fruitful is bathroom supplier Bathrooms.com. Having set out to become the biggest global retailer in the space, the first foreign market addressed was the French one.
Ian Monk, CEO of Bathrooms.com, says that Europe was first looked at due to its relative simplicity. ‘We felt we could put a foot into the continent without having to create too much of a logistical structure.
‘We import about 80 per cent of our product from the Far East, with 20 per cent from the UK. However, we’re working more with UK partner and manufacturers here.’
Going forward, Bathrooms.com will be sending several deliveries a week over the English Channel to a depot in France, where it will then be split up.
‘We could have spent another six to nine months getting everything perfect before we went out there but we chose to get out there quickly, learning as we go and adapting over time,’ he explains.
As the business sells a lot of its products online, Bathrooms.com has taken the step to gather a portfolio of keywords searched on in the UK and translate them into French to get optimum results.
Finding the demand
Servicing a market which is very reliant on imports of a particular product is exactly how High Breeds International has grown. The business is 100 per cent export based and currently turns over £20 million a year.
As a specialist egg hatcher, founder Nicholas Chandler sends his product to Europe and the Middle East. Annual exports have risen from zero to 69 million eggs in 15 years, while over the last three years 90 per cent of exports have been concentrated solely on Saudi Arabia.
Despite the success Chandler and his business has achieved in the Arab world, the enterprising entrepreneur is now planning to take operations to Africa which, he says, has the lowest consumption of high-quality protein in the world.
Chandler has made use of the Norfolk Chamber of Commerce with his exporting activities, one of a number of government organisations like the UKTI which help businesses bridge the gap to a wider market.
For Carter, he believes that business get out of these institutions exactly what they put in.
‘It is a two-way street. You need to join in with their activities as much as they help with advice.
‘But I’d certainly recommend it to anyone going into exporting. They have a lot of programmes of networking you can go to.
The issue of trust is a problem many businesses encounter when moving into new foreign territories.
Edwin Smith, director at BFS Buttons, says, ‘The fist thing you need to be confident about when exporting is that whoever you need to ship the goods actually will.
‘There are cases where you entrust your goods to a company and they never arrive for whatever reason. You need to be certain that you can trust the carrier you use.’
As a button wholesaler with a turnover of £500,000, BFS ships goods directly from China to Vietnam (it’s biggest market) and can control what happens in China. When goods arrive in Vietnam, however, the business has no control over anything that happens with customs or local delivery.
To combat this issue, Smith has his own approach. ‘We make it clear, particularly in the early stages, that we will not take responsibility for any local charges, be it local airport handling, local taxes or delivery charges.’
Smith recommends really getting to know your supplier and customers, as well as understating that if you’re dealing with a different country which doesn’t speak the same language then interpretation can be different.
‘I want to meet the people who I’m doing business with, it helps the relationship and how the dynamics are going to work,’ Smith explains.
‘Things like testing requirements – you might assume something is a given when purchasing from a UK company, but across borders there are different rules and regulations.’