Export for Growth Our Insight Your Guide to Getting Started in Exporting E: D2N2

Export for growth Our insight Your guide to getting started in exporting E: D2N2

D2N2 is the Local Enterprise Our purpose is to support and Partnership for Derby, Derbyshire, encourage economic growth in Nottingham and Nottinghamshire. the D2N2 region.

Our vision is to make our area Our ambition is to be one of one of the strongest and most the most respected LEPs, known resilient economic regions in for our professionalism and the UK. effectiveness.

Contact: Matthew Wheatley T: 07817749907 / 0115 9578744 E: [email protected]

D2N2 working to promote international trade and investment in partnership with: Exporting for growth | Your guide to getting started 01

Foreword

Welcome to D2N2's guide to getting started in exporting.

If your business is looking to export In years gone by it was thought that or simply want to know more, D2N2 before firms looked to sell overseas, The guide will help you is on your side. With our partners at they should build up a strong UK Trade & Investment we have domestic customer base. Exporting understand the produced this guide to support your firms would be large firms with opportunities out there business to access overseas markets. dedicated export departments. Although the international activities of and who can help you D2N2 is the Local Enterprise large firms remain crucial to the local Partnership for Derby, Derbyshire, get your export strategy economy, today increasing numbers Nottingham and Nottinghamshire and of small firms are exporting and right. is one of the largest LEPs in England many new starts are established covering an area with a population of primarily targeting overseas markets. over 2 million people and economic Local firms not only sell goods all output of over £36 billion. over the world but services too. The Our purpose is to support and range of overseas opportunities has encourage economic growth within never been wider and Government is the D2N2 region. We are ambitious boosting its support for new and and intend to make our region one of existing exporters through more the most resilient economic regions in money for UKTI. Across the UK the the UK through strong and productive Government wants to see an extra local firms creating sustainable 100,000 firms exporting. employment for a skilled workforce. Even with reports of ongoing issues in In partnership with UKTI, our three the Eurozone and lasting effects from Universities, the Chamber of the downturn, there are rapidly Commerce, other business growing overseas markets that representative organisations, local represent a real opportunity for UK government and local investment business. This guide intends to help marketing organisations we want to you take the first steps to access that help your firm to export successfully. opportunity. There is demand from Increasing exports can not only help across the world for products and boost economic growth in the UK but services from Derby, Derbyshire, also create jobs in the local economy. Nottingham and Nottinghamshire. This guide sets out 10 steps to export The guide will help you understand success and the support that UKTI the opportunities out there and who can give to you. It also includes case can help you get your export strategy studies of local firms who have right and ensure that you get paid for exported their way to success. the goods or services that you are exporting.

Colin Walton, Chair of D2N2 02 Exporting for growth | Your guide to getting started

It’s time to go global

Have you ever thought about doing business in overseas markets? If not, or you thought it too difficult, then you might want to think again. Exporting for growth | Your guide to getting started 03

Exporting can help you survive As hosts of the 2012 Olympic and If you become an and grow. There are real Paralympic Games in London, the opportunities to trade eyes of the world are firmly on exporter, the evidence internationally; UK products, the UK. This provides a perfect shows that you are services and expertise continue platform for UK companies to likely to improve your to be in demand across the world. showcase their expertise and do There are opportunities both in business in overseas markets. productivity by a third traditional, established markets This guide aims to help you grow in your first year alone. such as Europe and the US, and your business internationally. If Mark Prisk, Minister of State the high-growth economies of you haven t exported before, you for Business and Enterprise countries such as China, India, ' will probably have lots of Brazil and Russia. questions. As this guide sets out, there is a lot of expert assistance available. 04 Exporting for growth | Your guide to getting started

Why should I export?

Why should you take the Exporting can also be a catalyst A growing trend export plunge? for innovation. In many cases More and more UK companies are you will see new ideas and recognising the benefits of UK companies that export are opportunities overseas which will exporting. responsible for 60 per cent of national spur you to develop new and productivity growth and more than 70 modified products to meet the Research shows that a growing per cent of UK business research and needs of international customers. number of UK firms have development. This helps to This can help you to gain and increased their export levels. A give them a technical competitive retain a competitive advantage in recent study2 found that the advantage, leading to more sales the UK as well. percentage of UK firms doing and opening new markets. business overseas rose from 26 1 Academic research confirms that per cent to 31 per cent over a Doing business overseas is a different exporting companies: two year period. experience for every company and its benefits will vary greatly depending * are more productive and Exporting is not just for bigger on the personal profile of each firm. innovative than non exporters; businesses. A recent survey of around 200 smaller exporters As well as opening access to * are more resilient to an economic downturn; showed that three in every four new sources of revenue, trading planned to export more in 2011.3 internationally will allow you to spread * achieve stronger financial A separate study found that the risk across a wider range of performance; proportion of small UK firms customers, extend the market for exporting increased by 10 per specific products and ensure that you * have a higher profile and more credibility; and cent in both manufacturing and are aware of international competition. services over a six year period.4 In some cases companies are able * are more likely to stay in to offer much more interesting roles business. for their staff, and to recruit better people as a result. Exporting for growth | Your guide to getting started 05

Business benefits We developed our business Exporting can allow companies model with a global market to: Increase the returns in mind. We didn't want to Achieve levels of growth on investment in R&D. limit ourselves to the UK not possible domestically. 6 1 Improve financial and export was always an Increase the resilience performance. of revenues and profits. 7 integral part of our vision. 2 Improve 3Spread business risk. 8productivity. Paul Skellett, Wonderland Publications Achieve economies of scale Boost their profile and 4not possible domestically. 9recognition internationally. Increase the commercial 5lifespan of products and services.

An increasing number of young UK companies are grabbing Case study international opportunities from Wonderland, Derbyshire an early stage. Almost one in five new firms are currently active Rosliston-based Publishing "Signing up to Passport helped abroad and so have been doing Company, Wonderland, has a foot us massively," says Paul Skellet, business overseas since they in the door of the lucrative co-owner at Wonderland, "We started trading. American market after teaming knew we had to bridge ourselves up with UK Trade & Investment. between the UK and the States You too can join this growing and the funding helped us with club and gain the export The Wonderland team signed up our travel expenses to get that advantage. to the Passport to Export scheme initial footing in the US to start and visited the PGA merchandise the process of digitising show in Orlando where they were archives." able to take advantage of UKTI's partnership arrangements with the "UKTI is a best kept secret. It's British Golf Industry Association. great to have an organisation in They were given subsidised this current economic climate exhibition costs at the show and still supporting small businesses the chance to give press like ours with solid advice and

1 Harris, R. and Q. Cher Li (2007), Firm Level conferences to invited media. even some funding." Empirical Study of the Contribution of Exporting to UK Productivity Growth and www.wonderlandpublications.com Hart et al Impact of Trade Services on R&D Aston University August 2009 2 Study of the Relationship Between Innovation, Exporting and the Use of ECommerce, Harris and Li, 2010. 3 UKTI/IOD Doing Business Overseas survey, July/August 2010. 4 Study of the Relationship Between Innovation, Exporting and the Use of ECommerce, Harris and Li, 2010. 06 Exporting for growth | Your guide to getting started

Where should I export to? Exporting for growth | Your guide to getting started 07

One-to-ones with Embassy trade advisers are extremely valuable, and you can't get that on the internet. Simon Willis, Sales and Marketing Director, Royal Crown Derby

There is an abundance High-growth markets middle classes in China and India, of opportunities for UK UK exporters are also increasingly for example, are set to increase embracing the myriad opportunities household expenditure fourfold over exporters and plenty 5 offered by the world's emerging the next 20 years. The Chinese of support to help you middle class is forecast to grow take advantage of them. economies many of which are experiencing rapid rates of growth. from 172 million to 314 million in The UK is a major trading nation, Such highgrowth markets include the the next five years - more than the 6 able to capitalise on the single BRICs (Brazil, Russia, India and China), entire population of the US. market through the European Union whose dynamic economies will These rapid growth rates, combined (EU), as well as being socially close provide a wealth of prospects with progress in infrastructure, in terms of culture and language to for UK firms in the coming decades. communication networks and global a number of major international In addition to the BRICs, there are cooperation, are making doing markets including the US. other fast growing markets with great business in high growth markets Many UK firms begin exporting by potential, such as the so called increasingly commonplace for UK entering established markets such CIVETS (Colombia, Indonesia, Vietnam, exporters. For example, since 2002, as these. The EU, with its open Egypt, Turkey and South Africa). These the number of UK companies borders and shared import/export often smaller markets have much to exporting to China and India in the procedures, provides UK companies offer, and UKTI International Trade construction and IT sectors has with unrestricted access to more Advisers (ITAs) are well placed to increased by over 100 per cent. than 500 million consumers, while guide exporters on how to select the You don’t have to be an experienced the US continues to be our number best territory to target. exporter to enter a high growth one export market, offering Growth in such markets is driven by market. Two in five of the smallest opportunities across a wide range rapidly rising populations and GDP exporters (with fewer than 10 of sectors. levels. Research has shown that the employees) already do business in at least one high growth market.7 5 BIS Economics Paper No.8, UK Trade Performance: Patterns in UK and Global Trade Growth, November 2010 6 HSBC, October 2010 7 NIESR Analysis of the International Business Strategies, Barriers and Awareness Monitoring Survey, March 2010, and OMB Research, PIMS Qualitative Follow-up Study of Business Needs in Emerging Markets, June 2006 08 Exporting for growth | Your guide to getting started

Aid-funded business As well as working with specific Case study Case study geographic markets, there are 4fx Healthcare Ltd Royal Crown Derby also huge opportunities for UK companies in aid funded business John and Sarah Soulsby's Baby Royal Crown Derby is now on sale that is, the contracts awarded by Nose Clear product was selling so in Mexico's premier department multilateral agencies such as the well in the UK market that they store, thanks to some timely help UN and World Bank to support decided the time was right to from UKTI. projects in the developing world. move into export. Much of the implementation of UKTI arranged one-to-one these aid funded projects is With the help of UKTI, this meetings with Embassy Trade contracted out to the private Nottinghamshire-based healthcare Advisers at an event in Coventry sector, representing significant company soon broke into the and shortly afterwards the trade business opportunities for Irish market. An OMIS report team from Mexico invited Royal consultants, works contractors and helped them to better understand Crown Derby, along with Twinings, suppliers of goods and services. the potential in New Zealand and to a tea party at the British Every year, multilateral agencies they then used their export Embassy in Mexico City. spend some US$60 billion on template to explore the Australian Staff at Royal Crown Derby everything from tents to market. telecommunications. The UK continue to maintain a close currently gains between 4 and 17 Specialist help from Medilink East contact with their UKTI per cent of this aid funded Midlands has also contributed international trade adviser and business, with the most sought significantly to the company's dip in and out of the services as after expertise being in the international success. they feel necessary. Export drives healthcare, construction, are now planned for the Middle John says, Our relationship with consultancy, ICT, environmental " East and China. and transport sectors. UKTI and the funding we access are absolutely critical to our Export Manager Alison Peverley business. We couldn't afford to says, "The whole process worked realise these opportunities without well for us. From that intial their help.” contact with the UKTI commercial officer in Coventry and their idea www.4little1.com of the tea party, we've managed to secure a high profile customer in one of our prime target markets." www.royalcrownderby.co.uk Exporting for growth | Your guide to getting started 09 10 Exporting for growth | Your guide to getting started

A world awaits There are opportunities Brazil Ireland for UK exporters in all The value of UK goods exported Widely considered the easiest to Brazil grew by 24 per cent to overseas market for UK exporters, corners of the world. £2.2 billion in 2010. who sold goods worth £17 billion there in 2010. They include: China China has become the UK's ninth Mexico largest goods export market and UK goods exports to Mexico British export activity there rose increased by £207 million in 2010. by 418 per cent from 2000/2010. 24 per cent of internationalised UK firms said that they are already

France doing business here or are very or The UK s fourth biggest export ' quite likely to do so in the next market. two years. Source: All figures taken from 2010 UKTI India Russia International Business Strategies Barriers UK exports to India grew 45 per and Awareness Survey and ONS Monthly Around £3.6 billion of UK goods Review of External Trade Statistics, March cent between 2005 and 2010. 2011. were exported here in 2010. Exporting for growth | Your guide to getting started 11

International trade is more important than ever and exploiting the opportunities of fast-growing markets in Asia and Latin America is vital to the UK’s economic future. The difficulties and risks of operating in these fast-changing markets are less than the risk of not participating in their growth. Miles Templeman, Director General, Institute of Directors

Top 20 goods export markets for UK companies (2010)

US Germany Netherlands France Ireland Belgium/Luxembourg Spain Italy China Sweden A world awaits Switzerland Saudi Arabia and UAE Hong Kong Popular emerging markets Japan with nearly a quarter of Canada internationalised UK firms already doing business here. India South Africa UAE A popular emerging market, with Poland 45 per cent of firms involved in or considering export activity either Russia there already or with some Singapore likelihood of entering in the next two years. Australia US The UK’s number one export 0 10 20 30 40 market, with around £38 billion of Value of goods (£ billion) UK goods exported here in 2010. Source: ONS 2011 12 Exporting for growth | Your guide to getting started

Getting ready to export

It would have been daunting to travel round Japan on my own. I was very impressed that all my potential distributors came to visit me and that interpreters were provided when needed. Emma Ball, Emma Ball, Nottinghamshire

If you are serious about ITAs can draw on years of business Make an export plan trading internationally, experience and give you at no cost After completing your market you will want to think a more detailed assessment and research, you can draw up an practical advice on a one-to-one export plan defining how you will about how to research, basis. enter the new market. That target and grow a presence should include: in overseas markets. Carry out market research It is essential to carry out detailed • a marketing strategy which But how should you begin? How market research to identify and incorporates international do you even know whether evaluate the target market. Areas trade development; exporting is right for you? Before to examine include: • an understanding of the route you commit to exporting you need • the industry structure; to market, e.g. the preferred to honestly assess your export distribution channel for your potential both in terms of the • the predicted demand for your products or services; readiness of your business and of product or service; the chosen business model e.g. your product or service. The • the competition and how you • following steps should help you to plan to fit into that agent, distributor, B2B, sales do this. marketplace; and office, joint venture or subsidiary company; Assess your export capabilities • any modifications required to make your product or service • the necessary financial Business Link's online tool ‘Are saleable. resources; you ready to export?’ provides a quick, basic assessment of your Desk research is a good starting • the right people to develop the export capabilities and the issues point. An increasing amount of new export markets; information is available online and practicalities you need to • adequate knowledge of the know about before beginning to but you may also wish to consider requirements of your chosen export. The tool provides a useful commissioning some bespoke market e.g. modifying packaging starting point for discussions with research from an export specialist. to meet local regulations and standards; and a UKTI International Trade Adviser UKTI's Overseas Market Introduction (see ‘Who can help me export?’ Service (OMIS) draws on the local • an understanding of export and ‘UKTI contacts’ later in this knowledge and expertise of its staff payment mechanisms and export guide). around the world. The cost of this finance. is very competitive. Exporting for growth | Your guide to getting started 13

Key questions to ask before you export What are the unique selling Do you have sufficient resources Have you evaluated business 1points to your business 4(management time, project 7risks (such as protecting your proposition? Will there be finance and expenses) to fund intellectual property) and a market for your products your overseas projects? conducted research and due and services? diligence? Who will be leading the project Are there any legal barriers 5within your company? Do you know how to secure 2to your business model? 8payment and get the right Do you need to work with an quality products? Where in the market would 6overseas partner to succeed? 3you start? Can you communicate with them effectively?

Assess your product/service To assess whether your product/ Case study service is suitable for export to Seal Team Systems Ltd your target market, consider: • consumer preferences, Chesterfield-based Seal Team The UKTI Embassy trade team competitive offers (local Systems is a step closer towards conducted research on behalf of production and imported) and setting up a new operation in Seal Team Systems before they their market share; Ireland after joining a market arrived in Ireland and the • product standards and visit to Ireland, organised jointly Chamber of Commerce used EEN regulations in the overseas by Enterprise Europe Network generated profiles to identify market; the British Standards (EEN) Midlands and UK Trade & further contacts that might be of Institution offers help for Investment (UKTI). interest. exporters; and Initial research by the company, Technical Director Ken Black said, the costs of adapting your • which specialises in online leak "We wanted to talk to people product or service. sealing, flange and valve repairs, with 'on the ground' experience Understand the law suggested there was a real to see if the gap in the market There are various legal opportunity to grow the business we had identified really existed. responsibilities associated with in Ireland. The jointly organised We had a full programme of doing business overseas all of visit gave them the chance to " activity planned for us and we which you should understand meet prospects face-to-face and were very pleased with the before starting to export. test out their theory. quality of hte appointments. For example, you'll need to EEN built detailed company It was a positive first step familiarise yourself with the VAT profiles and liaised with UKTI in " towards selling overseas. rules administered by HM Revenue the region, the British Embassy " & Customs (HMRC), and be aware team in Dublin and the Chamber of any export controls which relate www.onlineleaksealing.co.uk of Commerce in Cork. A to your particular product. See ‘Who can help me export?’ later comprehensive programme of in this guide. activity was planned. 14 Exporting for growth | Your guide to getting started

Without the Export Marketing Research Scheme support we would not have been able to dedicate resources to doing the research properly. Susan Beastall, Director, Soutron

Selling and distribution You can use a sales agent who When arranging a sales contract Once the initial homework has sells products on your behalf, or with an agent or distributor, you been done, and you have decided puts you into contact with need to ensure that responsibility on the export market/s to potential customers on a for delivery and payment is approach, you then need to commission basis. Note that an clearly defined. You will also need organise your sales presence agent never takes title of the to secure intellectual property there. goods but merely stocks protection in each country you and sells them on, making a sell into. Depending on your product/ commission in the process but service, you may be able to sell never accepting responsibility for directly. For example, you might profit or loss. Marketing be able to sell over the internet Marketing is a key element of or by exhibiting at local trade You can enter into a joint venture successfully selling overseas. shows. with a local business. This gives To be effective, your marketing you a share of the management strategy should be tailored to Many businesses look for a and profits of the joint venture, each target market. partner who already understands but it can be a more complicated the local market. For example: and expensive option. You'll need to appreciate the traditions, culture and legislation You can sell to a distributor who If you want complete control over of the countries you are trading then sells your products locally. sales, you can set up your own with to exploit your exporting Note that a distributor takes title local office. This is the most efforts. Customisation of your of the goods once the sales expensive option. marketing activities is essential if transaction is complete; and is there are cultural differences responsible thereafter for any affecting the consumption of your profit or loss in stocking and product. UKTI’s Export selling them on. Communications Review can help. Exporting for growth | Your guide to getting started 15

Visit the market Visiting the market is an invaluable part of trading internationally. You will experience the marketplace first-hand, and make the contacts necessary to do business. Attending overseas events, such as trade fairs, or participating 314m in a trade mission can be great The Chinese middle class is ways to test markets, attract forecast to grow from 172 customers, appoint agents or million to 314 million in the distributors and make sales. next five years - more than the entire population of the US. 16 Exporting for growth | Your guide to getting started

Rising to the Challenge

It's worked so well for me that it really feels like UKTI are an extension of my company. Malcolm Hall, Managing Director, Hall-Fast Industrial Supplies Ltd

Exporting may be a challenge, Resource costs Legal, regulatory and but the potential rewards are Entering an overseas market may intellectual property issues huge. Following are some of require both financial investment The barriers to success which the most commonly cited and an increase in manpower. exporters talk about most are legal hurdles to doing business Timescales can also be an issue, and regulatory issues. Some firms with short-term pay-back not also say that intellectual property internationally, and advice necessarily guaranteed. (IP) protection can be an issue. The on how to overcome them. Intellectual Property Office (IPO) can It s advisable to discuss your ' help in this area. See ‘Who can help financial position with your me export?’ later in this guide. accountant and bank manager before committing to exporting. Adopting the right mindset is It is also important to take the vital to overcoming such hurdles. long-term view and build Every country has its own trading, appropriate timescales into your taxation and IP systems and you projections. Customers and partners will need to be willing to get to in high-growth markets, for grips with those systems and adapt example, tend to put an essential to them. So doing your homework is value on relationships and it is vital when planning market entry. unusual for a return on investment to emerge within the first year. Exporting for growth | Your guide to getting started 17

We knew from enquiries generated from our website that there was international demand. At that time we knew nothing about export and recognised we needed some help. John Soulsby, Managing Director, 4fx Healthcare Ltd

Managing overseas risk Political and economic developments, Case study cyber risks, bribery and corruption Soutron these are some of the issues your - Soutron develops and supplies together with the marketing business could face when you begin systems and software to libraries research before and during the to trade overseas or expand into and information professionals visit, gave us everything we fresh markets. such as HMRC and the Welsh needed to make some really UK Trade & Investment and the Assembly from its base in informed decisions when we got Foreign & Commonwealth Office Derbyshire. back to the UK." bring together authoritative, The company was at the stage Soutron decided that the best accessible and topical information where it wanted to actively seek route to market in Australia online on countries and the key global opportunities and set its was to engage a reseller and a issues related to their political, sights on Australia and New better understanding of pricing economic and business security Zealand. environments. levels has led the company to UKTI's Export Marketing Research adjusting their pricing upwards. This can help you identify and Scheme (EMRS) helped Director understand possible risks and guard Susan Beastall to research the "Without EMRS support we effectively against them. market thoroughly and, armed wouldn't have been able with quality appointments from to tackle Australia. We are in a the Overseas Market Introduction much stronger position now Service (OMIS), she was able to to bid for major tenders and use her time in Australia and secure the best business New Zealand to good advantage. partnerships possible," added Susan. Susan says, The contacts " the Embassy Team made for www.soutron.com us were invaluable and that, 18 Exporting for growth | Your guide to getting started

Language and cultural Being able to speak the language of barriers your potential customers can help to Case study Every market is different, and establish mutual confidence. If you Hall-Fast Industrial Supplies companies need to be sensitive to don't speak the local language, you local ways of doing business, even could consider investing in foreign UKTI's Passport to Export in different regions of the same language training for your staff. Programme has given Malcolm Hall, country. Lack of awareness and Alternatively, you could employ a Managing Director of Newark-based knowledge of local cultural norms translator or interpreter. It can also Hall-Fast, the confidence he needs can impede the development of help to have your promotional to succeed in international markets. a business relationship. material translated. It's a good idea to avoid colloquialisms and The company supplies high-end metaphors in promotional material automotive parts to manufactrers - they could be embarrassing in the and Malcolm knew he would have local language. to diversify in order to succeed. The workshop (part of the You should conduct research into Through the Passport scheme, Passport Programme) was your target market to establish local Malcolm had access to an absolutely essential; it considerations. These may include export skills development covered all you need to product or packaging modifications programme, a dedicated mentor, to enable your product to conform match funding to support their know about export. to local cultural demands. Or it could export strategy, bespoke action Nigel Heldreich, Proprietor, Wheathills be that local sales and marketing planning and access to a global channels for your particular product network of trade advisers based are different from those in the UK. in Embassies, High Commissions and Consulates around the world.

"The Passport programme was a real turning point," says Malcolm. "It gave me the knowledge to make better decisions and be more proactive internationally.

"Best of all I have gained so much confidence that I have been able to drive the export share of my business from 15% of sales to 35% in under 3 years. The great news is that it's not at the expense of the UK business. We are looking at overall growth next year of 50%."

www.hall-fast.com Exporting for growth | Your guide to getting started 19

Logistics The best mode of transport for clearance in the customer’s country Getting international transport your goods will depend on the – and use the correct Incoterms to right can be complicated and type of goods and how quickly describe this in the quotation and depends on the agreement you they need to be delivered. You written contract. may need more than one mode, have with your customer or Most companies use a specialist for example, sending goods by supplier. Your obligations should freight forwarder to handle transport. lorry to a port in the UK and then be clearly set out in a written Confirm exactly what they will do by ship overseas. contract using Incoterms – and whether they can handle all In all instances, the goods will standard trade terms which state documentation and other need suitable packaging and who is responsible for procedures. Look for a forwarder labelling for transportation. You transporting goods, insuring the who exports regularly to that should clarify in advance who will goods during transportation, destination. They can ‘consolidate’ be responsible for UK customs paying duties and customs your goods with other consignments procedures, for freight and clearance. in a single container to reduce costs. insurance, and for customs 20 Exporting for growth | Your guide to getting started Exporting for growth | Your guide to getting started 21

Case study Wheathills

Wheathills of Derbyshire is a long established family run business using traditional methods of cabinet making and furniture restoration. To ride out the recession, proprietor Nigel Heldreich developed a personalised memory box that he wanted to start selling overseas. Unsure of where to start Nigel approached UK Trade & There are also currency issues you Investment and signed up to the Getting paid need to consider. In some countries Passport to Export Programme The risk of late or even non where there are restrictions on access which would give him all the payment can sometimes be greater to foreign currency, your customers necessary tools to grow his when doing business internationally. may face problems getting currency business internationally. Ensuring you get paid for overseas sales is a combination of assessing to pay you. In this case, it's worth Being on the Passport risk, settling on acceptable payment insisting on a (confirmed) irrevocable Programme and gaining a better terms and methods and considering letter of credit that secures understanding of export issues insurance to protect yourself payments according to the terms of has helped the company to save against problems. the credit and often at an agreed money. Nigel has also been able rate. to use the grant funding from Help is available from UK Export Businesses that sell on credit to the programme to refresh his Finance (formerly known as ECGD) foreign customers can use factoring marketing literature for targeting see page 25. or invoice discounting to free up his new overseas markets. To minimise the risks of non cash flow. Export factors specialise in

payment, you should research the the collection of money from With mentoring support from his market conditions in your target overseas. The factoring company International Trade Adviser, Nigel country and the credit worthiness pays you a percentage of the invoice has explored the US market and of potential customers before you value up front and the balance been on visits across Europe, start trading. (less their percentage) once they achieving particular success in have collected payment. Switzerland. Nigel says, "It has taken us two years to get to where we are now. Going on the Passport Programme has given me a real sense of confidence for future success overseas." www.wheathills.com 22 Exporting for growth | Your guide to getting started

Getting it right

Ten key steps to successful exporting 1 2 3 Research your market Implement an export strategy Construct an export plan Does your prospective foreign and review your capabilities Define how you will enter the customer need what you are selling Ask yourself: what would my foreign market. Finalise human at the price that will yield you a business gain from exporting? resources and marketing strategy profit? What is the competition and allocate an adequate budget to and how will they react? cover export start-up costs. 6 7 8 Get the Customs side right Get paid on time Choose your distribution Contact HM Revenue & Customs Ensure your cashflow will remain methods and the UK embassy of your at a safe level. Guarantee sufficient Consider the implications of destination country to clarify credit for your future sales. Take selling over long distances and requirements. Make sure your out insurance cover if necessary. across national frontiers. reporting practices are watertight. Exporting for growth | Your guide to getting started 23

4 5 Choose your sales presence Promote your product Establish whether you need a direct How are you going to market and sales operation. Or is an agent sell your product? Customise or distributor more effective? marketing to the target country. How will you manage your overseas sales presence? 9 10 Transport goods effectively After-sales policy Assess and choose the most Regularly liaise with customers, effective transport method and export agents and banks. Monitor make sure the goods are insured political unrest or other adverse by you or the importer. conditions in the country of destination. Manage regular servicing and warranty claims.

Source: UK Trade & Investment 24 Exporting for growth | Your guide to getting started

Who can help me export? A wide range of support services exists to help UK exporters and would-be exporters to tackle virtually all of the issues and challenges which they are likely to face, and help them become established in international markets. Following are just some of the many organisations that can help you get started on your exporting journey. Exporting for growth | Your guide to getting started 25

UK Trade & Investment UKTI services have helped its UK Export Finance UK Trade & Investment (UKTI) is customers to: UK Export Finance is the operating the Government Department that • understand how to do business name of the Export Credits helps UK-based companies succeed overseas; Guarantee Department (ECGD), in global markets and assists the UK s export credit agency. identify opportunities and ' overseas firms in bringing their • open doors; UK Export Finance does not lend high-quality investment to the UK. directly, but supports UK exports • reach customers/business UKTI has a global network of partners not otherwise accessible; by issuing insurance contracts to 2,400 staff. Its International Trade UK exporters and by issuing Advisers (ITAs) around the UK have • raise their profile and credibility guarantees to banks which make years of business experience to overseas; loans to overseas borrowers, which draw on when advising companies. • overcome barriers to entry are used to purchase supplies In 96 markets based in British or expansion; from UK exporters. UK Export Embassies and other Diplomatic Finance's services help facilitate improve overseas marketing offices around the world, UKTI • export contracts by providing strategy; staff can offer local, in-market protection against the risks of the knowledge and expertise. • gain access to information exports not being paid for. not otherwise available; UKTI has helped many thousands In 2010/11, UK Export Finance of businesses achieve international • understand the competition; (then known as ECGD) supported success by providing tailored • access powerful research to £2.9 billion of UK exports (up from services with specialist support inform management decisions; £2.2 billion the previous year). In covering a wide range of and late 2011 it announced an industries. Its clients consistently extension to its credit insurance have the confidence to explore cite the importance of UKTI • policy to cover all sectors and or expand in overseas markets. support in helping them to sizes of company, as well as the overcome barriers to new overseas www.ukti.gov.uk launch of three new short-term business and improve their business products. performance. See the following pages for details of those services provided by UK Export Finance which are most relevant to small and medium sized businesses. www.ecgd.gov.uk

UK Trade & Investment and UK Export Finance services and products are detailed overleaf. 26 Exporting for growth | Your guide to getting started

UK Trade & Investment – services

Passport to Export Events and seminars High-value opportunities Provides new and inexperienced Held across the UK and the world. programme exporters with the training, planning They include specific sector and Proactively identifies global supply advice and ongoing support they market based activities. chain opportunities, coupled with need to succeed overseas. an online service giving access to Trade missions several hundred sales leads Overseas Market Introduction Organised to help UK companies around the world each month. Service (OMIS) visit the marketplace they're A tailored service by our overseas interested in and talk face to face teams to access market and with prospective business partners. industry information, identify UKTI also organises missions into potential contacts or assist in the UK to allow overseas delegates planning an event. This service to meet with potential partners attracts a charge. or investors. I think using UKTI makes Export Marketing Research Business opportunities us different. It keeps us Scheme (EMRS) News emailed directly into your ahead of the game. Offers support, advice and some inbox, highlighting hot leads in your Pam Dubois, Assistant Managing Director, grant funding to eligible companies chosen overseas market. Companies ILS English wishing to research a potential can sign up for this free service export market. by visiting www.ukti.gov.uk Export Communications Review Gateway to Global Growth (ECR) A service for more experienced Assesses the way companies exporters. It offers focused planning communicate with overseas and advice, and support customers and makes practical to help companies to build on their recommendations for improvement. previous success and develop new overseas markets. Exporting for growth | Your guide to getting started 27

UK Export Finance – products and services UK Export Finance has In the case of an advance Foreign Exchange Credit a range of products and payment bond, the exporter's Support Scheme bank may require the exporter to When an exporter enters into an services to support UK deposit the buyer's advance export contract under which it exports; mentioned below payment with the bank as will be paid in a foreign currency, are those specifically security for the exporter's the exporter may be exposed to targeted at small and undertaking to pay. This would unfavourable changes in exchange medium sized businesses. deprive the exporter of the rates over the course of that contract. - cashflow benefit of the advance In order to bring certainty to this Export Insurance Policy payment. UK Export Finance can aspect of the contract, the exporter Under an export contract, there is provide a guarantee to the bank may ask the bank to enter into a always a risk of not being paid by of up to 80 per cent of the contract to purchase, with sterling, the buyer or of not being able to advance payment bond's value, the foreign currency which the recover costs incurred performing which will reduce or remove the exporter will receive at a pre-agreed the contract due to it being requirement to use the advance rate of exchange. payment as security, thus freeing terminated in circumstances beyond However, the bank will be taking the exporter's control. up funds with which to perform the export contract. a risk on the exporter's ability to UK Export Finance's Export deliver the required amount of Insurance Policy may be able to Export Working Capital foreign currency on the agreed date: provide an exporter with cover Scheme if the exporter fails to do so and against those risks, such as To fulfil an export contract, the exchange rates have moved against specified political or buyer-related exporter may require funds in the bank, the bank may suffer a events, which prevent it being paid, order to be in a position to loss. The bank may therefore wish to lead to the contract being provide goods or services. receive some protection against this terminated, or prevent its Specifically, the exporter may risk of loss before entering into the performance. have won more or larger contracts forward foreign exchange contract. than usual and a bank may be Where the exporter's bank has been Bond Support Scheme cautious about lending any requested to provide a working Under an export contract, the buyer further funds to meet the capital facility guaranteed by UK may require the issue of an on- exporter s needs for more working ' Export Finance in respect of an demand contract bond (for example, capital, thus constraining the export contract and is also requested an advance payment, performance company s ability to grow. ' to enter into a forward foreign or retention bond) in order to assure exchange contract in relation to the itself that the exporter will meet UK Export Finance's Export same contract, UK Export Finance its obligations. Before issuing such Working Capital Scheme can offer will increase its guarantee of the a bond, a bank will require an a partial guarantee to the bank working capital facility in order to undertaking from the exporter to (of up to 80 per cent of the value enable the bank to enter into that pay to the bank any amounts which of the working capital facility in forward foreign exchange contract. the bank may pay out under that some cases), so that the exporter bond. The bank is therefore taking a can gain access to the working Further information risk on the exporter's capital with which to perform a specific export contract. For additional information or creditworthiness under that details on the full range of UK Export undertaking. Where the bank Finance's services, please contact is unsure about taking that risk, a them on +44 (0)20 7512 7887 or visit guarantee from UK Export Finance www.ecgd.gov.uk for part of it may persuade the bank to issue the bond. 28 Exporting for growth | Your guide to getting started Exporting for growth | Your guide to getting started 29

Other sources of help

As well as the help RBS NatWest Your lawyer available from UKTI and David I.Houghton MBE, Your lawyer will also be able to Director, Strategic Partnerships help you. Similar to the ICAEW's UK Export Finance, there M: +44 (0)7785 708611 BAS, the Law Society has many are many other sources E: [email protected] members which offer a service for of help available to you. Santander SMEs. Lawyers For Your Business Martin Hodges, is a network of 1,000 solicitor Head of Trade Finance firms in England and Wales Your bank M: +44 (0)7827 872312 offering specialist advice and a Your bank can provide a range of E: [email protected] free half hour initial consultation help on topics such as managing to small and medium-sized foreign transactions, trading Your accountant businesses. Advice can be sought overseas in sterling, owning assets Your accountant can provide you on a range of legal issues both abroad, exchange rates and with a range of advice, from domestic and international. starting a business, organising managing foreign exchange risks. In 2012 the Law Society will also your financial affairs, financial For more detailed financial advice be working with its solicitor management and taxation. You and guidance on issues that members to produce practical should also be aware that the affect you, you should talk to the Doing international business Institute for Accountants ' ' international section of your bank. guides aimed at SME firms new in England and Wales (ICAEW) If you can't find the right person to exporting their products and has just launched a new scheme: to talk to, you could contact the services internationally. following people at the one of small businesses across the UK the five major banks: are being offered free expert The guides will look at some of advice from ICAEW Chartered the fundamental legal issues Barclays Accountants as part of an which SMEs need to consider John Bevan, initiative called the Business when working internationally. Head of Trade and Working Capital Advice Service (BAS). Topics being covered will include: T: +44 (0)1256 791401 It aims to help small companies international employment issues; E: [email protected] and start-ups with business and • HSBC financial advice to help economic • international contracts; Felipe Hsieh, Senior Manager, growth. Small businesses can • business structures; TSC Client Management find details of ICAEW chartered M: +44 (0)7920 411997 accountants in their local area at • debt recovery; T: +44 (0)20 7991 1706 www.businessadviceservice.com • tax; and E: [email protected] dispute resolution. Lloyds TSB • Barry George, Senior Manager, These guides will be available as Trade Products publications, but also as webinars M: +44 (0)7793 670292 and will be promoted widely to T: +44 (0)20 7463 1690 small businesses. E: [email protected] For more information visit the Law Society's website at www.lawsociety.org.uk 30 Exporting for growth | Your guide to getting started

Derbyshire and Export Control Organisation HM Revenue & Customs Nottinghamshire Chamber of (ECO) HM Revenue & Customs (HMRC) Commerce (DNCC) Any item exported from the UK provides assistance on a number The Chamber offers a range of which is subject to export control of matters relating to the services for both would-be and needs a licence. The ECO is importing and exporting of goods. experienced exporters. These responsible for assessing and Information and guides are include an export documentation issuing (or refusing) export available covering topics such as service, international licences for a wide range of the classification of goods, the apprenticeships, international controlled, so-called strategic European Union, Relief Procedures student placement, international goods. This includes military and on Duty and VAT, Tariffs and trade advice, international trade dual use items. Duties, Intrastat and the training and market visits and requirement to submit You can find out more on export events. An international forum Supplementary Declarations, controls, including applying for also meets on a regular basis to together with basic guides on a licence and rating enquiries, discuss international trade topics. export licences, export taxes, licensing policy, key documents, import licences, rates of exchange, For more information visit key links, notices for exporters etc. www.dncc.co.uk and news related to export control, by visiting the www.hmrc.gov.uk businesslink.gov website at www. The Institute of Export (IoE) businesslink.gov.uk The Institute's mission is to Business Link enhance the export performance The Business Link website of the UK by setting and raising Intellectual Property Office provides the information, advice professional standards in Intellectual property rights can and support needed to start, international trade management allow you to own things you maintain and grow a business. It and export practice. They achieve create, in a similar way to owning provides information and advice this by the provision of education physical property. You can control to help customers make the most and training programmes. The IoE the use of your IP, and use it to of their opportunities. Rather than offers recognised formal gain reward. IP rights only give providing all the advice and help qualifications in international protection in the country where itself, it fasttracks customers to trade. It also runs a series of they are registered, so if you are the expert help they need. For short training courses covering thinking of trading internationally, SMEs thinking about exporting every aspect of international trade then you should consider there is a simple diagnostic tool management, sales and registering your IP rights abroad. that helps you consider whether marketing, logistics and now is the right time to export. The UK s Intellectual Property Office documentary requirements, and ' (UKIPO) can provide guidance: For more information go to international trade finance. www.intellectual-property.gov.uk www.businesslink.gov.uk/bdotg/ For more information visit the IoE action/layer?r.l1/1079717544&r.s/ website at www.export.org.uk tl&topicId/1084654164 Exporting for growth | Your guide to getting started 31

Enterprise Europe Network Useful export links Midlands (EEN) Country Information Standards and Technical Win business in Europe - grow your profitability and achieve BBC website Regulations sales, prepare to beat your http://news.bbc.co.uk/1/hi/country_ British Standards Institution competition wuth the right profiles/default.stm (BSI) research from Enterprise Europe www.bsigroup.com/en/ Foreign & Commonwealth Office Network. Want to improve your sectorsandservices/Disciplines/ country profiles understanding and pursue ImportExport www.fco.gov.uk/en/travel-and- with confidence contacts and living-abroad/travel-advice-by- National Physical Laboratory international business. EEN can country/country-profile www.npl.co.uk assist you in: • leads of opportunities, potential Customs & Regulations Trade Statistics buyers, suppliers and trade HM Revenue & Customs National Statistics Information partners www.hmrc.gov.uk www.statistics.gov.uk/hub/index. • meet and reach agreements html with overseas firms Economic Information • create new products with new The Economist UK Trade Info European technologies www.economist.com/countries www.uktradeinfo.com safeguard your business from • Market Access Travel Advice the latest legislation, make Foreign & Commonwealth Office your voice heard to improve Market Access Database for laws for small companies Tariffs (for non-EU markets www.fco.gov.uk/en/travel-and- Tel: 0115 957 8746 only) living-abroad Email: [email protected] http://madb.europa.eu/mkaccdb2/ NHS Web: www.een-midlands.org.uk indexPubli.htm www.nhs.uk/nhsengland/ SOLVIT – Overcoming Trade Healthcareabroad Freight forwarding Barriers (EU markets only) Travel Health One of the other things you'll www.bis.gov.uk/ www.travelhealth.co.uk need to think about is how to EUMarketAccessUnit move your goods overseas. Much will depend on the nature of your goods and their destination and you will need to evaluate the best combination of time and cost with the characteristics of your product. There are various methods of shipping goods: by air, road, sea, or rail. Some companies offer multi-modal solutions; this means that they offer more than one service. For more information about freight forwarding please contact the British International Freight Association at www.bifa.org 32 Exporting for growth | Your guide to getting started

UK Trade & Investment UKTI East Invest NI is the Government T: +44 (0)8456 419 955 T: +44 (0)28 9023 9090 department that helps E: [email protected] E: [email protected] www.investni.com UK-based companies UKTI East Midlands succeed in an increasingly T: +44 (0)8450 524 001 Scottish Development global economy. E: [email protected] International T: 0800 917 9534 within Scotland Our range of expert services can UKTI London T: 44 (0)141 228 2828 from the UK be tailored to meet the needs of + T: +44 (0)20 7234 3050 www.sdi.co.uk your company to maximise your E: [email protected] international success. Business Wales UKTI North East They are delivered through an T: +44 (0)3000 603000 T: 44 (0)8450 505 054 extensive network of market + E: businessinformationhelpline@ E: enquiries ukti.rito.co.uk specialists, based in the UK and @ wales.gsi.gov.uk across the globe. UKTI North West www.business.wales.gov.uk You can find contact details for T: +44 (0)8456 037 053 your local UKTI International E: [email protected] Trade Adviser on our website: UKTI South East www.ukti.gov.uk T: +44 (0)8452 789 600 E: [email protected] or telephone us: +44 (0)20 7215 8000. UKTI South West Our helpline is open from 9.00am T: +44 (0)8456 060 969 to 5.00pm Monday to Friday. E: [email protected] UKTI West Midlands T: +44 (0)8450 743 515 E: [email protected] UKTI Yorkshire and the Humber T: +44 (0)300 365 1000 E: [email protected] © Crown copyright 2011 You may re-use this information (excluding logos) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit: http://www.nationalarchives.gov.uk/doc/ open-government-licence/ Or you can email: [email protected] Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned. Any enquiries regarding this publication should be emailed to us at: [email protected] Or you can call: +44 (0)20 7215 8000 This publication is also available at: www.ukti.gov.uk

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UK Trade & Investment is the UK Trade & Investment is responsible Government Department that helps for the delivery of the Solutions UK-based companies succeed in the for Business product Helping Your global economy. We also help Business Grow Internationally. These overseas companies bring their solutions are available to qualifying high-quality investment to the UK's businesses, and cover everything from dynamic economy acknowledged as investment and grants through to Europe's best place from which to specialist advice, collaborations and succeed in global business. partnerships. UK Trade & Investment offers expertise and contacts through its extensive network of specialists in the UK, and in British embassies and other diplomatic offices around the world. We provide companies 2010 winner Best Trade Promotion with the tools they require to be Organisation in the developed world. competitive on the world stage.

Published May 2012