Whether you're starting an import export business, or your existing business is ready to expand overseas, this guide provides insights on some things to consider when starting to export.
Useful tips and information if you’re looking to start trading abroad
Icon expand Decide where to sell
Identify potential markets with some desk research. Before undertaking or commissioning research you should:
- Identify clear objectives: detail what you want the research to do
- Establish what information is essential to you: define what you need to know, rather than what's nice to know
- Know your short and longer term marketing objectives, and make sure they are in line with your market research
Research helps exporters determine:
- Which markets to enter and when
- The best routes into a market
- How to position your product or service in your chosen markets
- Suitable customers, and any competitors
- Barriers to market entry
There may be government funding available to support your research and to identify opportunities in overseas markets.
Methods of research
Online market research
Also known as desk research, this is usually carried out before any other type of research activity. Online sources are readily available and generally free or inexpensive.
If you’ve gathered enough data through online research to help select appropriate markets for your product or service, the next step should be in-market research, also known as field research.
A country visit will allow you to gather specific information on the market for your product or service. This could be combined with a visit to a trade show or conference, or participation in a trade mission. The data you’ll gather in-market should be accurate and up-to-date. There may also be in-market research agencies who can do country research for you for a fee.
Whilst travelling to other countries is temporarily on pause due to coronavirus, listing your products on global e-commerce sites can be a good way to gain early feedback on whether there will be demand for your products in any particular region. If you take this approach, it’s worth spending some time studying the best practices for listing your products so that you can take full advantage.
Visit nibusinessinfo.co.uk for more information about researching overseas markets.
Icon expand Understand the local business culture
Taking an interest in the culture of your customer helps build trust and shows you are serious about a long-term relationship. Not being prepared could lead to a misunderstanding that affects your business relationship.
Read the exporting country guides on nibusinessinfo.co.uk.
Icon expand Create an export plan
An export plan is a business plan for selling overseas. It should detail the decisions you’ve made based on your market research, your objectives and how you plan to achieve them. It should also incorporate how you will be able to fulfil orders and what changes you may need to make to support your international aspirations.
Your export plan is a tool to show banks, investors or partners that you’re serious and have realistic and achievable goals.
Read more about how to plan your export market strategy on nibusinessinfo.co.uk.
Icon expand Choose a route to market
There are many possible routes into export markets. Certain routes will be more appropriate depending on the market and your level of exporting experience. For example, initially you may decide to export directly to overseas customers to test the market. If that goes well, the best way to increase sales may be to identify a good agent or distributor who can assist in building customer relationships.
As market share increases companies often consider the next major step is to set up a business in that country or enter into a joint venture agreement. The rewards and control may be higher but so are the risks as it may be a significant investment.
The main ways to enter an export market are:
- Direct sales
- Use an agent or distributor
- Use licensing or franchising
- Create a joint venture agreement
- Set up a business abroad
More information about selling and distribution in overseas markets can be found on the Invest Northern Ireland website at nibusinessinfo.co.uk.
Icon expand Market your services overseas
Customer expectations and service norms will vary from market to market, and the marketing of services will need different approaches to those you’d use for physical goods. Develop an appropriate marketing plan, based on the preferences and expectations of your target countries.
Read more about marketing your product or service overseas on the Invest Northen Ireland website at nibusinessinfo.co.uk.
Icon expand Understand business risks when exporting
Risks of exporting should be balanced with the advantages of accessing new markets to grow your business.
When exporting to new markets, you may need to familiarise yourself with specific areas of risk for each target market.
Find out more about managing risk on the Invest Northen Ireland website at nibusinessinfo.co.uk.
Icon expand Prepare transport and logistics
Icon expand Managing payment for export orders
Research your target country before you start exporting. Different countries have different regulations and laws around payments and currency. For example, you may be expected to accept payment by cheque by customers in the United States. Some countries have strict rules about local currency and bank accounts. Others require specific paperwork or additional information on commercial invoices.
It’s important to ensure that you get paid in full and on time. When negotiating sales, be clear about your expectations regarding payment and make sure these are covered in sales documentation (for example, contracts, price lists) and agreed in advance. Ensure that payment terms have been fully understood by the customer.
The payment terms you offer your overseas customer may depend on several factors:
- How well do you know your buyer?
- Is this the first export order from this customer?
- What terms is the customer requesting?
- How much risk is involved?
- How large is the contract?
- Who is responsible for insuring and shipping your goods?
Check out our full suite of trade finance products.
Security may be required. Product fees may apply. Over 18s only. Subject to status, business use only. Any property or asset used as security may be repossessed or forfeited if you do not keep up repayments on any debt secured on it.
Need more information? Invest Northen Ireland has produced this guide to getting paid when exporting.
Icon expand Insure against non-payment
Before you fulfil an order, think about what happens if a buyer doesn’t pay. You should:
- Research the country to see what legal recourse you have
- Consider a payment method that offers more security like a letter of credit
- Consider getting insurance to cover the risk of non-payment (credit insurance)
Trade credit insurance is an insurance policy and a risk management product offered by private insurance companies. Exporters can take advantage of an insurance policy to protect themselves from the non-payment, insolvency or bankruptcy of their customers.
Icon expand Manage non-payments
Once a payment is late:
- Follow up immediately as soon as a payment deadline is missed.
- Establish the cause of non-payment - examples could be issues with documentation, customer complaint or concern about the quality of the product or service delivered, financial constraints, insolvency.
- Seek to resolve as a matter of urgency issues relating to documentation or product quality, so that this is no longer an issue for payment.
- If the reason for non-payment is financial, consider whether a short extension of payment terms will help to resolve the situation. This needs to be done in the context of the long-term profitability and value of the relationship.
- Make a claim on your credit insurance, if you have it.
We’ve listed resources that might be of interest to you below, but please note this is not advice or a recommendation. There may be other options available to you and it’s important that you do your own independent research.
With our expertise in global trade finance, we could help you by improving your cash flow, and gaining control over your imports and exports. See the trade finance options that could be available to you.
Invest Northern Ireland
Visit nibusinessinfo.co.uk, a free service offered by Invest Northern Ireland. The site is the official online channel for business advice and guidance in NI.
We are currently in a transition period for leaving the EU which will last until the end of 2020. There are actions that you can take now to prepare your business which do not depend on negotiations.