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Exporting for Growth | 10 Steps to Success

Why export? UK 63,000,000 POPULATION

LESS THAN 1% OF ALL THE PEOPLE ON THE PLANET

Exporting for Growth | 10 Steps to Success

Are you ready to export? It is undeniable that expanding your business domestically provides growth, but to achieve substantial growth you and your business must venture into new, selective international markets through exporting. By expanding your sales footprint into new territories your business will be protected from domestic economic challenges. This increase in productivity will increase your businesses resilience, your volume of sales and margins providing a better bottom line. The prospect of trading internationally may feel overwhelming with a number of key areas that strike uncertainty. That’s why UK Trade and Investment (UKTI) is here to work and provide guidance to UK based businesses to ensure their success in international markets through exports. Start you export journey with a UKTI International Trade Advisor (ITA) with access to the resources that can help you build a plan and achieve success. This guide will provide guidance on the 10 crucial areas for consideration and planning.

Contact UKTI by visiting www.gov.uk/ukti, or by calling +44 (0)20 7215 5000 (9-5 Mon-Fri)

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Exporting for Growth | 10 Steps to Success

Key considerations Demographics

Competition

Disposable incomes Understand what your products and brand have to offer New markets and entry options

Exporting for Growth | 10 Steps to Success

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Exporting for Growth | 10 Steps to Success

10 steps to success

Exporting for Growth | 10 Steps to Success

1. Research potential markets Firstly you want to identify which market to target. Your ITA will help you narrow down the best places to start in any given market and which route to take. This will enable you to target your resources and achieve the best returns.

1. Research potential markets 2. Export strategy and plan 3. Sales and routes to market 4. Create opportunities 5. Understand the admin 6. Get paid 7. Legal considerations 8. Financial 9. Logistics 10. Happy customers

UKTI offers a number of market research services, which will help provide in-depth information regarding the best route to market. For example, UKTI’s e-Exporting Programme will guide you on which e-marketplaces are best to sell through, allowing you to reach new customers online. Contact your local UKTI office to arrange a free meeting with a Digital Trade Advisor to find out more. Take advantage of UKTI offices where they offer a number of market research services, which will help provide in-depth information regarding the best route to market. Additional factors such as population density, or groups with particularly high income levels will also influence what market you choose to take your business. Alternatively there may be expats that are looking for traditional home-grown brands.

UKTI’s ITAs provide businesses with first class advice and guidance on each of these steps to success. Located in 40 offices around the UK, contact one of UKTI’s dedicated sector specialists to start your export journey.

Contact UKTI by visiting www.gov.uk/ukti, or by calling +44 (0)20 7215 5000 (9-5 Mon-Fri)

Whether you opt for the easier or more challenging markets, one thing is certain – they are growing very fast.”

Some markets are easier to break than others and your ITA will help you discover what the barriers to export in different geographies are. This will help you identify the best ‘first export’ market making your journey as easy and smooth as possible. For more information about potential growth markets, visit www.gov.uk/ukti and read through the individual country guides to find out what it takes to export to multiple countries.

To find out more about UKTI’s e–Exporting Programme and how it helps retailers and brands grow their global growth through online channels, visit www.gov.uk/e-exporting. Contact UKTI by visiting www.gov.uk/ukti, or by calling +44 (0)20 7215 5000 (9-5 Mon-Fri)

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Exporting for Growth | 10 Steps to Success

2. Export strategy and plan You’ll want to put together an export plan covering the steps, targets and resources that are attainable and worth investing in. UKTI have a network of regional, overseas and digital experts who specialise in your products and services. Your ITA will help assess the initial export readiness of your business to move forth with working on your business plan. UKTI also has Digital Trade Advisors (DTA’s) that can speak to you about how to increase the reach of your brand globally through e-commerce. The consultation with an ITA or DTA is free, so you have nothing to lose; just a whole load of insight, information and new opportunity to gain.

To set up a meeting with your local ITA, visit www.greatbusiness.gov.uk/ukti/ To join UKTI’s e–Exporting Programme, visit www.gov.uk/e-exporting

Exporting for Growth | 10 Steps to Success

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Exporting for Growth | 10 Steps to Success

Exporting for Growth | 10 Steps to Success

3. Sales and routes to market Have you considered if you would need to set up a direct sales force, or whether an agent or distributor would be a better route to market? There are five options open to you:

1. Selling directly This involves a direct local sales force, but equally could mean simply setting up a website and selling online, or regularly visiting and selling at trade shows. Direct selling doesn’t have to mean you incur the cost and management overheads of hiring local people, complete with the local contract laws and payroll or taxation requirements. It means you sell your goods directly to an end user, without the need for a middleman.

2. Sell to a distributor Perhaps the simplest option, as once you have sold your goods to the distributor, they take title and it becomes their responsibility to sell them on to their customers. As the distributor takes on maximum risk for this option, the margins you will make is likely to be the lowest of all the options.

3. Use a sales agent They will sell the products on your behalf or put you into contact with potential customers. While they will stock and sell the products they never take title nor do they accept responsibility for your profit or loss. They will make a commission on every sale.

Direct, distributor, sales agent or joint venture, the best option depends on your goods and the market.”

4. Create a joint venture In some markets this may be your only option, but is often very complicated and expensive.

Essentially you will set up a brand-new business with another local company taking a share of the management and profits. In countries like China this is a typical practice.

5. Exporting through e-marketplaces Did you know that 3.7bn parcels were sent in Europe in 2013, one in 20 retail dollars are spent online in the USA, approximately 83% of Japanese internet users visit retail websites and Marks and Spencer is one of the fastest growing womenswear brands on Chinese e-marketplace Tmall? Demand for British goods from online consumers around the world is growing fast. In reaction to this, UKTI is now providing UK retailers and brands with a unique perspective on how to meet world-wide demand for your products. Find out how to access free support and advice by visiting gov.uk/e-exporting as well as gather insights on the future of e-commerce and how it will affect your business.

To set up a meeting with a Digital Trade Advisor, visit www.gov.uk/e-exporting Contact UKTI by visiting www.gov.uk/ukti or by calling +44 (0) 20 7215 5000

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Exporting for Growth | 10 Steps to Success

4. Create opportunities Trade shows and market visits Trade fairs, both in the UK and abroad create opportunities to meet buyers and generate new business. Grants may available to subsidise the cost of exhibiting, or perhaps you could share the cost of a stand with another business. Contact your ITA for further information on possible funding available to support your attendance at these missions.

To set up a meeting with your local ITA, visit www.gov.uk/ukti

There are four tips for anyone looking to make a market visit:

1. Do your homework about your product and their USPs compared to the competition, the market and the potential customer. 2. Take two or three different sets of packaging for the same product and test out which is more appealing to buyers. This feedback could mean the difference between modest exporting success and fantastic growth. 3. Prepare a compelling sales pitch persuading why a potential customer would use your service.

 rade shows are one of T the best places to promote your products and services.”

4. Adverts can be placed in business directories or product catalogues to help you gain exposure and start selling.

Exporting for Growth | 10 Steps to Success

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Exporting for Growth | 10 Steps to Success

Exporting for Growth | 10 Steps to Success

5. Understand the admin To avoid any unexpected tax bills, there are a few admin obligations that are essential you get right. Get in touch with HMRC as well as the British Embassy of the destination country to clarify what requirements they have around customs registration, forms, payments, and so on. You’ll want to get this right and make sure that your reporting practices are watertight. The documentation needed to comply with local and domestic import/export and tax requirements will vary considerably across different markets. As a first step contact your ITA who can provide you with recommendations about which freight- forwarding companies can deliver your products. Support offered as part of UKTI’s e- Exporting Programme: • Expertise and advice on building your online and e-commerce presence • A fast-track government programme enabling you to sell your products on many of the world’s leading e-marketplaces • Better than market rate commercial terms with e-marketplaces and social media platforms • Access to a free government database with information on over 450 B2C e-marketplaces • Access to a list of online service providers, helping to increase the efficiency of your e-commerce presence • Global retail/e-commerce events and online resources • Regular news on e-marketplace promotions and recruitment exercises designed by UKTI

To join the e–Exporting Programme visit www.gov.uk/e-exporting

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Exporting for Growth | 10 Steps to Success

6. Get paid After you’ve done all of your work identifying the market you wish to sell into, ensuring that your products are appropriate, developed your marketing and enforced the right distribution and sales engine, the orders will start flowing.

Exporting for Growth | 10 Steps to Success

Training courses in all of the practical elements of exporting are run by the British Chambers of Commerce and your ITA and the e- Exporting programme will be able to provide details on documentation requirements and advise on specific expectations for payment terms relating to your e-commerce presence.

seller to agree details on the terms of sale and prevent any future misunderstandings or disputes. Broadly they will set out who is responsible for the cost of transporting goods including any insurance, taxes or duties, where the goods should be picked up from and transported to, and who is responsible for the goods at each step during transportation.

To set up a meeting with your local ITA, visit www.gov.uk/ukti

2. Export documentation

There are a few practical elements you need to understand about terms of sale: 1. Incoterms These are internationally agreed rules setting out delivery terms for the goods being traded across borders. They allow both the buyer and

Make sure you establish the types of document you’ll need to provide to enter the market.

3. Written quotation Provide a written quote which deals with the particulars of your product including the size and packaging formats. Setting out the price and delivery terms (incoterms), the estimated date of shipment on arrival and payment

terms and conditions is vital if you are to avoid any disputes further down the line. Within the EU, payment terms are fairly similar to those in the UK where you may have an expectation that they will settle their bill within 30, 60 or even 90 days. Be sure you know what currency they will be paying in and have the requisite facility in place to accept payment in that currency. When orders are fairly small, customers from outside the EU may be happy to pay upfront and there are other mechanisms for getting paid which can help to reduce risk to both parties, such as Export Finance.

Contact UKTI by visiting www.gov.uk/ukti, or by calling +44 (0)20 7215 5000 (9-5 Mon-Fri)

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Exporting for Growth | 10 Steps to Success

Exporting for Growth | 10 Steps to Success

7. Legal considerations Many companies say that one of the biggest hurdles they faced at the start of their exporting journey was around legal considerations. Having a thorough understanding of the legal and regulatory environment in all countries you’re considering exporting to is really important. Thankfully there are a number of organisations that can help to advise you on how to avoid the pitfalls and turn these perceived hurdles into easy steps.

Getting the right legal advice early on can prevent legal issues from becoming a barrier to successful exporting.”

Legal considerations Understand the legal and regulatory environment Contracts Cover for product liability Use an experienced international lawyer

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Exporting for Growth | 10 Steps to Success

Exporting for Growth | 10 Steps to Success

8. Financial With any new business venture there are always risks. UKTI can help advise how to minimise these risks. As an exporter the majority of the risks sit with you so making sure you have adequate protection against non-payment or for any loss or damage of goods Contact UKTI by visiting www.gov.uk/ukti or by calling +44 (0) 20 7215 5000 There are a number of insurances that can help. Most insurers will offer products covering damage and loss of payment so check with your current insurer first. If they refuse or you can’t find adequate cover from elsewhere then you can contact UK Export Finance who may be able to assist. Transportation companies or freight forwarders usually assume limited liability for any loss or damage when shipping goods. Although you will have carried out credit checks this won’t guarantee that payments are made so it’s also recommended that you protect against non-payment in order to minimise impact to your cash flow and business. You can take out insurance against the customer becoming insolvent or being unable to pay for reasons such as natural disaster.

Make sure you have adequate protection against non-payment or for any loss or damage of goods in transit.”

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Exporting for Growth | 10 Steps to Success

Exporting for Growth | 10 Steps to Success

9. Logistics International transport can be complicated and getting this right can depend on the agreement you put in place with your customer. Your respective obligations should be clearly written down in the contract using Incoterms, which are standard trade terms denoting who is responsible for transportation, insurance, paying duties and customs clearance. The type of products you sell will determine which method of transport is best for you, although you may need more than one, as items shipped via sea will then require either train or lorry transportation to their final destination. Make sure that the goods are packaged adequately and that labelling is clear and visible. Either you or your logistics provider will be responsible for UK customs procedures, clearing customs in the customer’s country, freight, and insurance, and all of these should be incorporated with the correct incoterms, along with the quote in the contract. The simplest way to ensure that all of these things are covered is to use a specialist freight-forwarder, but make sure you confirm exactly what they will do for you and whether they could handle all the documentation and other processes. Do some vetting and ensure that whoever you choose exports regularly to the market you’re going to. This may mean that they can consolidate your goods with other consignments into a single container, thereby reducing your costs.

Using a specialist freight forwarder can simplify logistics.”

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Exporting for Growth | 10 Steps to Success

10. Happy customers Now you are in new markets, you have overseas agents or distributors, and customers are buying your goods! You should use every opportunity to increase your chances of getting repeat business, build brand awareness and reputation as a reliable international exporter. Some ideas to help you achieve this are: 1. Build brilliant relationships Making regular visits to the market to review progress with your customers will create lasting relationships. You should treat them just as you would a UK customer with regular contact, product updates and offers.

2. Delivering on time You’ve spent a lot of time and money getting everything in place and now you’ve got customers who are falling over themselves to buy your product. Nothing is going to annoy them more as they expectantly wait for their goods to be delivered. Sometimes delays cannot be avoided, particularly if goods are being shipped via sea, but even if things are not going quite right you should make sure you communicate early and often with your customers.

Exporting for Growth | 10 Steps to Success

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Exporting for Growth | 10 Steps to Success

About UKTI UKTI helps UK-based companies succeed in global markets and enables overseas businesses to invest in the UK with a global network of over 2,400 staff in 101 markets.

UKTI provides many thousands of businesses with free support to help them achieve success overseas, and can also deliver more bespoke chargeable services, tailored to specific client needs. UKTI provides companies with the ability to: • Understand how to do business overseas • Identify opportunities and open doors • Reach customers/business partners not otherwise accessible • Raise their profile and credibility overseas • Overcome barriers to entry or expansion • Improve overseas marketing strategy • Gain access to information not otherwise available • Understand the competition

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• Access powerful research to inform management decisions • Have the confidence to explore or expand in overseas markets

markets

Over 2,400 staff

Contact UKTI www.gov.uk/ukti, or by calling +44 (0)20 7215 5000 (9-5 Mon-Fri)

Exporting for Growth | 10 Steps to Success

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gov.uk/ukti

UKTI UK Trade & Investment is the Government Department that helps UK-based companies succeed in the global economy. We also help overseas companies bring their high-quality investment to the UK’s dynamic economy acknowledged as Europe’s best place from which to succeed in global business. Disclaimer Whereas every effort has been made to ensure that the information in this document is accurate, neither UK Trade & Investment nor its parent departments (the department for Business, Innovation and Skills, and the Foreign and Commonwealth Office) accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. © Crown copyright 2014 You may re-use this information free of charge in any format or medium, strictly in accordance with the terms of the Open Government Licence. To view this licence, visit: www.nationalarchives.gov.uk/doc/open-government-licence or e-mail: [email protected]. Where we have identified any third party copyright information in the material that you wish to use, you will need to obtain permission from the copyright holder(s) concerned. Any enquiries regarding this material should be sent to us at [email protected] or telephone +44 (0)20 7215 5000. This document is also available on our website at www.ukti.gov.uk Published January 2015 by UK Trade & Investment

UKTI HEAD OFFICE General enquiries: 1 Victoria Street London SW1H 0ET Telephone: 020 7215 5000 Email: [email protected] Contact form: contactus.ukti.gov.uk Tweet: @UKTI