Progressing your plans
Draw up a shortlist
One approach is to consider five to ten large and fast-growing markets for your product or service. Look at the performance of those markets over the past three to five years.
- Has the market growth been consistent year on year?
- Did import growth occur even during periods of economic slowdown? If not, did growth resume with economic recovery?
Don’t limit the research to similar countries as you may miss significant new markets.
Research the market for a product
Examine trends which could influence demand for your product or service. Calculate the overall consumption of similar products or services and, for physical goods, identify the amount imported. Studying the competition, both domestic and international, will help you understand market preferences. For marketing purposes, become familiar with channels of distribution, cultural differences and business practices. Research potential UK or foreign government incentives to help promote trade and support market penetration and growth.
Research potential trading partners
This is probably the most difficult aspect of the research, as business specific information is often limited. Research using the internet and social media may identify specific feedback which can help inform decisions and online reviews of a potential partner may indicate how they generally behave or the quality of their service. Organisations such as the Department for International Trade may also be able to assist with market specific research. Mitigate risks as best you can by using appropriate services and internationally agreed standards and practices, including Incoterms, as well as considering payment methods such as letters of credit or documentary collections which can provide some protection.
Understand country specific regulations
Identify any foreign barriers (tariff or non-tariff ) for the product or service being imported into the country, as well as any UK barriers (such as export controls) affecting exports to the country. Local laws and regulations ought to be thoroughly investigated as well. In addition, as part of the process of exporting, you may need to adapt the labelling of your product to meet local regulations. Laws can vary from one country to another, so a simple translation is inadvisable.
Consider the risks
If it looks too good to be true, it generally is. Spend time thinking of the possible negative consequences of entering into a new supply chain arrangement. The following should also be considered:
- What are the legal, regulatory and financial risks to the business?
- What impact will this opportunity have on the cashflow and finances?
- How you cope with a delay in payment or receipt of goods?
- How did any partner business cope with the pandemic and what did they learn in terms of the flexibility and robustness of operations to events outside of its control?
Understand your staff needs
Trading with multiple countries and regions will present many logistical and procedural differences which staff need to be trained and supported for. The following things should be considered:
- Is the management team capable of developing a comprehensive import/export plan?
- Does the team have adequate personnel to meet increased demand or the capacity to hire or contract staff to meet needs?
- Does your business have trained marketing and import/export administration staff, or the ability to hire qualified people, with experience in buying or selling products or services abroad? (an alternative is to use intermediaries with the required expertise, such as agents, distributors or trading organisations).