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Business Strategy

Demystifying Exporting for Manufacturers

It may not seem like it on the surface, but now is a great time to get started with exporting. Manufacturing Advisor and international trade expert Chris Manka shares his top tips for newcomers, who to mine for valuable information and debunks some of the myths that may have been putting you off.

Why aren’t more small manufacturers looking overseas for growth?

One of the biggest problems, I think, is that horrible word “export”. It makes something quite simple sound like a black art.

All “export” really means is selling to people who live further away. That’s it. As a manufacturer, you’re probably already doing the work to understand what drives customer decisions here in the UK – exporting is just doing the same exercise in another location.

So what’s stopping you?


Myth #1: Now’s not a great time for exporters!

Yes, the world is a very tumultuous place at the moment. Look in the media and you’ll read all about how weak the pound is and how difficult that makes things for businesses, especially those who import goods.

But there’s a flipside. The lower the price of sterling, the more competitive your product actually becomes to overseas buyers. In some ways, now is the perfect time to dip your toes in.

By way of example, one of my clients supplies components to Israel. With inflation rocketing, their Israeli customers were worried about them raising their prices. However, because of the low value of sterling against the shekel, my client managed to keep their prices the same, while making 30 per cent more profit. The situation is working in their favour.

Similarly, established brands like Bentley and Rolls Royce are currently breaking their own sales records because their cars are now better value overseas.

I know what you’re thinking: what happens when the pound inevitably gets stronger again? Doesn’t my argument go out the window?

No, because if there’s one thing I’ve learnt as an international trade consultant over the last three decades, it’s that people deal with people. If you supply the right product with the right service and build a good connection with overseas customers, the relationships you form will be able to ride the ups and downs of currency trading.

In other words, you can use the weak pound as leverage to get your foot in the door of a new market. It gives you a little extra margin to be competitive. By the time the value of sterling rises again, you’ll already be established in the marketplace.


Myth #2: I need to strengthen my UK customer base first!

In this day and age, where everything is accessible on screen and anybody is discoverable from anywhere, the idea of selling to somebody who lives a bit further away is just as feasible as someone who lives down the street.

There’s no longer any need to build your business up in the UK before looking at exporting. Your customers can come from anywhere at any point in your growth journey.

This means you need to be ready for an international enquiry at any stage. I’ve written before about a second hand car dealer who got an enquiry completely out of the blue from Ghana that led to him exporting a significant number of cars to Africa each month. That experience led to an even bigger export opportunity in New Zealand. The owner wouldn’t have even considered exporting a possibility previously, yet there he was – an extremely successful exporter within a year.

In many ways, exporting has never been easier. In the past, you’d have to travel to trade shows and take several weeks out of every year to visit places and learn about local markets first-hand. Now you can find out most of what you need to know online, and if you need more information you can just jump on a video call with someone.


Selling overseas: Where to start?

If you’ve never exported before it can feel like a minefield. Start simple: do some desk research in your own time to understand how your market sector works in different territories.

Look at your existing UK competitors. Which ones are operating overseas and what countries have they focused on?

Generally speaking, it makes sense to focus on countries where English is the first language – the US, Canada, South Africa, Ireland, Singapore, Australia, New Zealand and so on. These are soft entry markets for newcomers as there is no language barrier and they have similar legal frameworks, so you can get to grips with the lay of the land quickly.

The latter examples above are ideal for SMEs because they aren’t huge populations, so you can cut your teeth in these markets without needing to worry about building up lots of additional production.

Not every location is relevant or viable, but it’s an exciting part of the journey to find out how people do things differently elsewhere.


Where to get the best tips

My colleagues and I in the Growth Hub’s Manufacturing Team are a great resource to tap for export advice. You can also get plenty of guidance from the Department for Business & Trade.

But here’s an additional tip I’ve picked up over the years: speak to an independent freight forwarder. These are professionals who operate as intermediaries and organise shipments, and you can often find them at networking events.

Freight forwarders are a gold mine of information for all kinds of things you’ll need to know to make yourself export-ready. Independent forwarders are also used to dealing with smaller order sizes in all kinds of niche markets, whereas the larger freight companies are less likely to want to deal with smaller prospective customers.

If you import goods, your suppliers may also be a great source of information. You already have relationships there so start a conversation with them. What are the circumstances that led them to move into the UK market? What can you learn from their experience? What can they tell you about selling in their country? The lessons you learn on the purchasing side will be useful when readying yourself for export.

Exporting to markets you import from also gives you the added advantage of already trading in local currency. You can use some of the local currency you earn to pay your suppliers and avoid having to pay exchange rates.


Ready for a meeting?

Yes, exporting requires a bit of work, just like it did to build up your UK customer base. But know this: the returns are greater for every new market you enter. Your second export market will be easier than your first, and your third easier still. And all the time you’re building up the resilience of your business.

Our Manufacturing Team have the knowledge and connections to get you started, so get in touch today.

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Chris Manka

Chris Manka, Manufacturing Advisor

 Chris has over 25 years of business experience, with a background in marketing. He has worked in different sectors, including FMCG, food, retail infrastructure and medical devices. Chris has also worked as a business consultant, specialising in international trade and business development.

Chris was brought up with manufacturing – his parents owned and ran a small textile business, and the experience has stayed with him throughout his career, being able to relate to processes when developing products, and being able to communicate effectively with suppliers. In addition, Chris has been an active member of the Federation of Small Business and has held the position of region chair NW for two terms.  Chris was a founding member of the team that wrote and delivered a Northern Powerhouse manifesto for small businesses and he remains a passionate advocate for the North.

Chris has a very can-do approach to progressing projects, with an ability to see potential and structure a sustainable route for progress.

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