Central England small and medium size enterprises (SMEs)
may be missing out on valuable opportunities to do business
abroad by having a reactive, rather than a proactive approach to
exporting. New research suggests as many as 25% of those who export
claim to have 'fallen into it' rather than it being a part of the
strategic growth plan.
The findings of the study, 'The eXport factor: British SMEs'
approach to doing business overseas', published by Barclays
Business in collaboration with Kingston University's Small Business
Research Centre, also reveals that this more reactionary approach
explains why some SMEs in Central England started exporting in the
first place: 63% were approached directly by customers, whilst 29%
were introduced to new customers through an existing client and
supplier relationships.
Not actively pursuing new opportunities may explain why only 7%
of non-exporting SMEs in this part of the country may consider
taking the plunge in 2011. This is despite the widely held
view of analysts that believe exporting has the potential to bring
considerable benefits to individual businesses and national
economies.
Jeremy Stockdale, Head of Local Business in the Central region
said: "An export boom in 2011 could present SMEs in this region
with an enormous opportunity, and yet it's surprising to learn so
few who currently don't export are planning to do so this
year.
"Owner-managers are under extreme pressure, so spending time
developing a detailed plan for exporting may not always be
realistic. However, in taking a more passive approach, there is a
risk that SMEs in this region are failing to make the most of the
opportunities out there. Now is the time for SMEs to consider
taking a more proactive approach, even if this is just to
familiarise themselves with the information and advice available to
them, so opportunities can be maximised when they arise."
Barclays Business recommends five questions for owner managers
to ask themselves to check if they are export ready:
• Research your target market
How will your product fit in the identified market, what are
competitors offering? Also consider the culture, traditions and
legislation within any market.
• Choose your sales presence
How do you intend to sell in this market? Do it yourself, use an
agent, distributor or create a joint venture with a local
partner?
• Get the Customs side right
Work with HMRC to ensure you will have the correct documentation
to export. The UK embassy in your target markets will be able to
advise on local import requirements.
• How do intend to supply
Ensure you know how you will deliver orders, taking into account
delivery time and costs of differing shipment methods. Also
consider what the after sales service will be.
• Get paid on time
Ensure you have adequate finance/credit in place to support your
expansion into export markets and be clear on how you intend to get
payment. Our CreditFocus product can help you with this.
Professor Robert Blackburn, Kingston University Small Business
Research Centre, said: "Exporting is often advocated as a strategy
for owner-managers to increase their sales and revenue. However, it
does involve additional costs and uncertainties over and above
those faced when serving domestic markets. The research reveals
that owner-managers do not consider a master plan as a
pre-requisite to securing overseas customers. Many do not plan to
export: they fall into it or regard it as part of their normal
business. The research also reveals stickiness in terms of the
geographical sales patterns of SMEs, as owner-managers concentrate
on serving existing markets."