Why are you waiting to sell abroad?

The UK is bursting with wonderful stories of owner-managed companies selling around the world, proving there really are no obstacles to exporting

We Brits are painfully shy about exporting. The trade deficit figures tell a dire story. So what’s wrong? When asked, owner-managed firms can cough up all sorts of excuses, including can’t speak the language, worries about currency swings, the UK is so big there’s no need to go overseas, and so on. Yet there’s a growing band of small firms proving how lucrative it can be and that there is no obstacle which can’t be overcome.

Peter Westerman is the perfect role model. For starters he’s exporting welding supplies to West Africa. Oh, and he’s 80 years old.

Emerging market

At the last count, Nigeria accounted for 15 per cent of Westermans International turnover. Most folk would assume it’s a terrible destination to pick. Corrupt and bureaucratic? Not at all, says Mr Westerman.

Top 5 barriers to exporting for SMEs“Nigeria is a great location for European businesses to sell to. There are no trade restrictions limiting what European countries can supply to Nigeria, and there are lots of options in terms of companies to do business with, including both African businesses and European companies that are opening up offices and manufacturing headquarters there,” he says.

And the corruption? “An undeserved reputation indeed,” insists Mr Westerman. “Many consumers and some business owners view Nigerians as scammers, but this reputation is wrong. While there are some scammers operating online out of Nigerian bases, the same could be said for almost any other country. There are numerous legitimate and hard-working businesses operating out of Nigeria, and as long as business owners practice due diligence, such as getting paid up front, particularly when dealing with new clients, doing business in Nigeria is a great option.”

Many small companies are scared of exporting because of things such as exchange rate concerns, but don’t let that put you off

He points out that he can work in English with buyers and there is huge demand from the oil industry. Other firms may want to sell to Nigeria’s 173 million citizens. It is a growing, prosperous and relatively untapped market. It even beats China, says Mr Westerman. “Nigeria could be the next major market for UK and European businesses. It certainly is for us,” he says.

FX risk

Currency swings are tricky, if unmanaged. Exchange Communications based near Glasgow got whacked a few times. Tom Sime, owner and managing director, recalls: “Working internationally you are often being paid in different currencies and it can take longer for payment to come through,” he says. “In that window – and it can happen even with an existing client who has different processes in different countries – it can take some time to get paid. At the start, we found that often by the time we were paid, a change in exchange rates could make a difference to the value of the overall deal and to our margins. We had our margins damaged badly in some deals – the worst example being when we lost £27,000, on a single piece of business in six weeks due to changes in the dollar exchange rate.”

The solution? “We reached out to our bank, RBS. We were given great advice on hedging money – something we had never done before. It was invaluable,” says Mr Sime. “The ability to complete a deal without losing your margin is absolutely invaluable. I would say to anybody thinking of importing or exporting to speak to their bank well beforehand. Many small companies are scared of exporting because of things such as exchange rate concerns, but don’t let that put you off. The advice and the training are there. You just have to ask.”

Where OMBs expect their customer base to increase

Online exposure

Some would-be exporters worry about sinking money into websites and distribution centres. In fact, many owner-managed companies don’t bother. Anna-Lee Kewley is the founder of baby products brand Baby Moo’s. She exports far and wide using eBay. “By setting up my own eBay shop and website, I found EU markets immediately accessible,” she says. “I got the benefit of the millions of consumers seeing my listings and ordering, so in many ways the markets I export to have chosen me.”

Marketing is expensive, so Ms Kewley uses social media. “Our Facebook page is run firstly as a parenting community and secondly as a marketing platform. This has allowed us to establish strong and personal relationships with customers throughout their parenting journey,” she says. “These customers often then go on to recommend Baby Moo’s to pregnant friends or choose to buy their friends baby shower gifts from us. We currently have 92,000 Facebook likes, which I’m glad has translated into sales.”

Please note that Ms Kewley is self-taught in all areas of business and only got going in 2010. Now she is selling worldwide. She says: “Many small and medium-sized enterprises choose to remain local and that’s fine, but the infrastructure is there to export. If you choose to grow your business through export, you don’t need a lot of capital to do so. I started off selling old kids’ clothes having spent just a few minutes setting up a shop on an online marketplace.”

Building contacts

Lack contacts? UK Trade & Investment (UKTI) can help. PCA Predict provides address databases for online retailers. Co-founder Guy Mucklow says: “We found UKTI instrumental in our international success. Having decided to arrange a business trip to Australia, we engaged our local branch of UKTI to conduct an OMIS or overseas market introduction service report on the country.

“The net result was that we ended up with 15 to 20 meetings that ran during ten business days. They were arranged to fit in best with my travel arrangements, and were with a mixture of senior decision-makers at some very well-known Australian brands and potential partner businesses.”

If exporting tempts you, there is an embarrassment of riches to get you going. One campaign worth checking out is Made in Britain, an independent organisation promoting British manufacturers at home and overseas. Logistics companies are helpful. They publish detailed guides to selling in a wide variety of destinations and their consultancy services will help you understand the best ways of distributing your wares.

WORRIED ABOUT THE LANGUAGE BARRIER?

Neil Westwood
Neil Westwood, managing director of Magic Whiteboard

Neil Westwood, managing director of Magic Whiteboard, exports to Finland, France, Germany, Spain and is now cracking Japan. Mr Westwood and his team can’t speak all these languages to business level. So how do they cope?

“Google Translate is useful for translating short sentences,” he says. “You need to use a professional for more complicated translations and your web page. We have translated our web pages into French, Spanish and German.

“We also use an automatic online chat called Zopim that automatically detects a question in a foreign language; we can then reply in English and the message gets translated into the local language.”

Now Mr Westwood is taking his whiteboards to Japan. Again, he simply hires translators. “When exhibiting at a trade show in Tokyo, we need to have a Japanese-English translator on our stand. It will be difficult to sell to Japanese buyers without this,” he says. “Translate all marketing materials and product names into the local language. The more effort you make to translate your product into the local language, the more successful you will be.” UK Trade & Investment (UKTI) can recommend translators, if needed.

Navigating leads in foreign destinations is tricky with a language barrier. So Mr Westwood joined the UKTI Passport to Export service and uses their Overseas Market Intelligence Service. “They contact about ten companies in the market you want to export to, send products to them and arrange appointments with buyers. It costs about £1,500 which is good value and saves you so much time,” he says.

“The trade adviser at the British Embassy rings the buyers on your behalf. They are credible and speak the language, and as a result often get their call accepted by the overseas buyer. They then introduce your company and product, and arrange an introductory meeting. We have done this in Finland, France, Spain and Germany.”