One of the most cited Brexit business opportunities is that there’ll be more freedom to export products and services globally – free from EU trade restrictions. So, can your business capitalise on global trade opportunities?
What are opportunities and challenges around exporting?
Selling to customers overseas could really transform your small business. It could increase your turnover significantly and enable your small business to grow much bigger and quicker than if you were to rely solely on UK sales, whether local, regional or national.
Exporting can also mitigate the risk associated with relying solely on UK sales. It can raise your profile, boost your reputation and enhance your credibility, while possibly allowing you to identify new opportunities that you can introduce into the UK.
Being a successful exporter requires hard work, careful consideration and planning. You should carry out thorough research into overseas markets, including customers, competitors, business culture, export legislation and tax rules. You should also decide how best to sell your products or services overseas and deliver them. You may also need to localise them to maximise their appeal to local customers.
With many changes and challenges to negotiate post-Brexit, you may decide to target non-EU countries. Alternatively, better sales opportunities for your business may exist in non-EU countries. So, how can you find out more about them?
How have trade rules changed post-Brexit?
The UK government agreed a trade deal with the European Union on 24 December 2020, described by the UK government as “preserving its zero-tariff and zero-quota access to the bloc’s [EU’s] single market”.
Whilst this averts the disruption of a no-deal scenario, it will still mean businesses trading with the EU will need to submit customs documentation – which was not the case when the UK was part of the customs union. We’ve compiled some of the key ways the trade deal could affect your business.
The most significant agreement so far, that differs from an existing EU arrangement, is the deal struck with Japan. According to the GOV.UK press release: “The deal is tailored to both economies and has secured that goes beyond existing EU deals, with big benefits for digital and data, financial services, food and drink, and creative industries. The deal brings together two of the world’s most technologically advanced nations, placing the UK at the forefront of shaping new global standards on digital trade.”
Talks with Canada and Mexico are due to commence in 2021 and there will be continued speculation about a UK-US trade deal – which may take a different direction given the change in the presidency.
Key statistics: How much does the UK export outside the EU?
Checklist: Identifying possible non-EU export markets
Here are some good ways to establish the opportunities and risks of exporting to certain overseas markets.
What information do I need to find out before exporting?
Before entering any new sales territory, thorough market research is essential if you want to avoid expensive and potentially disastrous mistakes. There are many questions you need to answer if you are to better understand whether targeting a new market is viable (it may not be).
You must assess demand and find out how big the market opportunity is for what you’re offering.
It’s essential to discover what potential customers buy in that new market, how they buy it and – crucially – how much they pay.
You also need to know what quality and service they expect.
It’s vital to find out what competition you’ll face, too. Who would your competitors be? What do they sell, how do they sell it, how much do they charge and what services do they provide?
These are all key questions to which you must find answers.
You should also identify any potential issues or barriers you’ll encounter in new markets, which could include local market rules and regulations, duties, taxes, standards, etc. And there are logistical considerations, such as how you will deliver products or services to the new market and how much this will cost. Packaging and labeling could be another issue, for example, you may need to produce new packaging in a new language with new product details.
How to research possible new export markets
You can find out a wealth of information online from your UK base (which is called ‘desk research’). It’s a great place to start and costs nothing other than your time. To save time, you can pay others to carry out research for you or to access data based on research others have already carried out. You need to be sure of the reliability of this research.
Once you have done this and the initial signs are promising, it’s wise to travel to new potential sales territories to carry out ‘in-market’ research. This can reveal the most valuable information and provide the opportunity for you to make good local contacts. You might be able to combine your visit with a trade show or conference.
Comprehensive market research can help you to decide what you need to sell, how and to whom, and – crucially – how much you can charge. You must be sure that your sales will cover all associated costs and generate sufficient profit for your business. However, if you target the right market(s), in the right way, it can bring a welcome boost to your turnover and really help you to take your business on to new heights.
Where can I get advice and information on exporting?