Although UK exporters have traditionally lagged behind their European rivals, there are many opportunities on the world stage for British business, while the barriers appear to be primarily psychological
The UK hasn’t been a great place for exports in recent years, and British entrepreneurs all too often view overseas markets as too far away and risky. Along with our poor grasp of languages, this has led to a fear of the foreign, which our European neighbours have largely overcome. However, the trade barriers preventing an entrepreneur from running a successful global enterprise are mainly imaginary. There’s no reason not to think globally. In fact, there are several advantages of being a UK business – language being one of them. And, with many home markets in decline, more opportunities are just what a growing business like yours requires.
Getting started
No matter what you sell or are looking to buy, time spent on research will be worthwhile. But before you blow huge amounts on a consultant, see what you can achieve yourself. You know your business and what underlies it, and the over-arching question is: can you make money out of that territory?
More specifically, you need to know if there’s a genuine demand there for your products and services or if there are good buying opportunities. Consider the competition, how advanced the market is and other key economic, social and even political factors that underpin your business here.
Steve Leach, founder of internet marketing firm Bigmouthmedia, was considering moving into Europe, but was uncertain which country to target first. His business was already trading in the US, but he felt that the market there was too advanced and that Europe would offer better opportunities. “Once we’d spent time in the US, we realised we were behind the game and had some serious competitors. A market that is more advanced is more difficult to compete with,” explains Leach.
“New York was about six to 12 months ahead of the UK, but France and Germany were lagging behind. Also, in terms of exiting, we could see that four of the top six companies in our sector were US businesses. However, what these well-established US firms didn’t have was a presence in Europe, which is a highly fragmented set of territories.”
So Leach and his team began researching Europe for a country to launch in. They looked at factors such as broadband penetration, e-commerce spend and what proportion of the population used the internet. Germany was identified as the prime candidate, and an office was opened in Munich. Later, it merged with the German business, Global Media, in a £40m deal, and the combined group is now one of the biggest companies of its kind in Europe.
First contact
Once you have identified your target, some more detailed information is called for. The government’s UK Trade and Investment (UKTI) is a good early port of call, as it provides free advice, one-to-one mentoring and also organises trade missions for those considering expanding abroad. You’ll also be well advised to find a lawyer and accountant with direct experience in the region you are heading for. Entrepreneurs say they spend a lot of time consulting their advisers, so be choosy and make sure you find one that you can form a good relationship with.
Forging local links in the target territory is also invaluable for inside knowledge and contacts. Of course, you’ll want to visit the country to gauge the feeling on the ground, but having a local guide is a great way to save time and money. A language school is one place to find native speakers who you could hire on a part-time basis to do research for you, and entrepreneurs have used this method successfully before. There’s nothing like first-hand experience, and getting to know people face-to-face. Entrepreneurs that trade overseas need to absorb something of the country they are dealing in.
You might be concerned that your new office will start to run out of kilter with your existing brand. Margaret Manning, founder of digital communications company Reading Room, solved this problem with an ‘office in a box’ when her company was expanding into Australia. “We recruited three people from the UK and an Australian,” she explains. “We then put them in a separate room, gave them their own computer system and got them to work together for three months with their own clients, before shipping them over to Australia.”
Trading partners
The specifics of creating a successful operation differs from one territory to the next, and business cultures vary hugely. A mistake many companies make is thinking they can do business ‘the British way’ when abroad.
Certainly, businesses trading in the US or China need to operate in an American or Chinese way, and work hard to adapt to the local culture and employ natives. But for all concerned in overseas trade, a leap of faith is inevitable, and you’ll need a good local partner to make your business work with new clients or suppliers.
Agents that buy and sell on your behalf, as well as looking after stock and providing after-sales support, are the crucial link between you and the principals in the territory. A bad name is easy to acquire but hard to shake off, so choose with care and think about the long-term when doing so. Les Lockwood is the chief executive of Powerlase, which sells high-powered lasers used by semi-conductor manufacturers. His business span out of London’s Imperial College in 2001, but primarily sells to clients in south-east Asia. Lockwood has decades of experience working in the region and recognises the importance of a top class agent.
