With Brexit causing a drop in the value of the pound UK exports are becoming more competitive and firms wanting a new route to growth should consider exporting. The government has recognised this and is further pushing its previously announced First Time Exporters initiative that helps firms new to exporting.

What should I consider before I start exporting goods?

Before you start exporting you need to be certain that there’s a demand for what you’re selling. Just as importantly, consider if your products will work without any modifications – electricity is a key point to note. Also think how an unaltered UK product would appear in an overseas market. In China, for example, white means death and red is considered lucky. At the same time, take advice on your company name and that of your product. Be very aware that what might seem innocuous in the UK could appear, for example, to be a form of vulgar slang in your target market. International brands spend fortunes trying to find product names that mean nothing and which are inoffensive.

It’s important to give thought as to the method of distribution, noting that local infrastructure may not be to UK standards. Also how you are to communicate and promote your company overseas. Apart from language barriers there may well be issues that relate to packaging and health and safety.

Do also take time to investigate the state of play when it comes to protecting your intellectual property such as trademarks, copyright and designs. If you can’t protect yourself, you may need to find other markets to trade in.

Other questions exporters should be asking of information sources include:

  • Are there any restrictions on movement of goods?
  • What standards must I meet?
  • What are the duties, tax and import procedures?
  • How do I establish a presence in the market?
  • Do any preferential trade agreements exist?
  • How reliable is the legal system?
  • What trading entities are allowed to operate?
  • What will the trading relationship be when the UK leaves the European Union?

How do I protect my currency position when I export goods?

Trading outside of the UK means dealing with currency risk. If you get your pricing right but fail to protect your currency rate, you could, on the one hand make more profit if the rate swings in your favour. However, a move the other way could wipe out your profit - and more.

For anything other than personal travel money your best bet is to use a foreign exchange broker (just search on Google). They can offer advice and services on options such as forward contracts (a currency contract at today’s price that is paid for in the future), a stop loss order (which guarantees a minimum exchange rate) and a limit order (selling currency for another when the rate reaches a given limit).

Getting paid for goods you export

You need to get paid for your exports and just as there are risks to trading in the UK, there are risks in selling overseas. You will also have to cope with language and cultural barriers as well as different legislation and of course, distance. The following offers practical advice on how you can ensure the risks are minimised.

Risk assessments, credit checks and insurance

The first step is to understand the country risks for your customer including the political and economic risks as well as any foreign exchange and conditions. 

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Risks, credit checks and payment

Next you need to run a credit check on the client; this will show up how they’ve dealt with liabilities in the past. There are a number of firms in this sector that can help – a web search for ‘international business credit search’ will offer options including credit agencies such as Experian, Dun and Bradstreet, and Creditserve.

In terms of payment, you can seek payment in advance before despatch. You can also seek a letter of credit where the customer’s bank will release funds once the relevant paperwork is completed. Another option is a bill of exchange where goods are only released once the bill

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It’s also worth considering credit insurance which, for a fee, will cover a loss should the customer not pay. You can insure against commercial risk (pure non-payment) or political risk (some form of intervening government action). 

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Credit insurance and further assistance

The private sector provides products in this area to support exporters. The British Insurance Brokers' Asssociation is a good place to start - once on their website type 'trade credit' into the search box.

A part of UKTI, UK Export Finance has a number of products that can also help. Note that backing will only be given to firms exporting to certain countries and where cover is not available from the private sector. The government, in other words, is the backer of last resort.

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Checklist: Tips to help you export for success

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Next Steps

Read more about exporting goods on the GOV.UK website

UK Trade and Investment (UKTI) helps businesses export and grow into global markets. They also help overseas companies locate and grow in the UK.

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Selling your products online outside of the EU

If you are selling goods or services online to countries outside the European Union (EU) they are known as exports and there are certain guidelines you must follow.

Read more

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