STARTING EXPORTING TO EUROPE – PLANNING IT OUT
It is my pleasure to introduce you to a talented colleague. This guest post is by Stuart Allcock, a business consultant and entrepeneur based in Ireland. His company Applied Business Support Ltd helps businesses internationalise their activities, removes barriers to business growth, and works with universities to commercialise their technologies.
This article is intended for the small to medium-sized US business looking to export for the first time and thinking about selling into the European Union (EU). Realistically this article’s tips could apply to any part of the world you’re thinking of exporting to, not just the EU. There’s plenty to do to prepare yourself before you think about jumping on a plane going eastwards.
Planning for exporting isn’t really much different to formal business planning for any organisation. Some owner/managers argue that you can’t really plan a business strategy until the company has already got some hard trading experience behind it. This may have merit.
However, the flaw is that sound business planning is done on a foundation of diligent market research (MR). If it’s done properly, it’s designed to uncover important facts about what pitfalls and risks to avoid in the venture as much as opportunities to exploit. Risks in exporting can be costly so mitigating those risks with good MR makes good sense.
Planning starts with diligent market research
It’s like arranging a car vacation to a region you’ve never visited before. First you need to research what the region is worth visiting for such as culture, countryside, coast, food specialities etc. Otherwise you could be unaware of all these tourism opportunities, at best coming across them by chance. Then you would plan out where you are going to visit, which route you will take, and where to stay.
As best you can, you’d maximise the best use of your resources – mainly your quality time and money for an enjoyable vacation. With no planning you might go nowhere of particular interest and pay a lot for mediocre hotels and food. See any analogies with business planning?
Export planning is no different
Simply put, with export planning you’re still looking at selling products or services into markets and territories, taking into account all the resources needed, calculating the financial impact for commercial viability, and addressing risk. If export planning wasn’t already part of your original business planning, then there are quite a few additional things to consider.
Some of these points are mentioned below. It sounds a bit dramatic to say ignoring them is at your own peril – that might be a “worst scenario” situation, but there’s some truth in the statement. Realistically exporting can be fun (if you like travelling and experiencing different cultures!). It also has to be lucrative so it helps if a bit of common sense and good MR and planning is employed from day one.
Risks can usually be reduced and costs minimised if a few general things are observed in the export initiation process. A few suggestions are:
- Do your research diligently. You don’t even need to leave your desk to collect a lot of usable MR information. All you need is online access and a telephone.
- Supports might be available from your local government agencies to assist with export preparation. There are other sources too. For example in Ireland, if you’re considering setting up your own offices and maybe such as production or assembly, you should talk to IDA Ireland (www.idaireland.com) to see if and how they can help you. Each EU country has its own inward investment government agency.
- An exploratory visit to your selected country/ies will be essential as part of the initiation process and even before selling starts properly. This could be for visits to potential end-users for validating the product or service, meetings to evaluate future sales partners, or research at local exhibitions.Differences in cultures (= the way we do things) may mean your existing products/services aren’t quite the right specification – or even could be downright inappropriate for some countries! There are 28 sovereign countries in the EU, most of them with distinct cultures between them.
Selling in the EU
Broadly, Ireland and the UK and maybe even the Benelux countries don’t differ too much in the way business operates and products are accepted. In any case, wherever you’re intending to sell in the EU, it’s almost certain you will come across this issue at some time so these facts need checking out very carefully before selling starts.
- Different ways of doing business in different countries can impact on various business processes. For example – impacting on debtor days, how your goods are sold such as needing field trials beforehand, and the extent of shared responsibilities with in-country partners such as resellers and who pays for certain marketing outlays.
- Be cautious about proliferating the number of countries you try to sell to when you start exporting. This especially applies to the small business with limited external sales resource – who is often the owner/manager in any case.
- Are you personally geared up for exporting? Often, unsociable travel times and lugging suit cases around required a certain level of fitness. Spending time away regularly can also impact on family relationships. All this needs taking into account time because different people react to this in different ways. Do you need to carefully schedule time away or should you consider recruiting a sales person – even part time if you can afford it?
- Last but not least, with all this focused activity going on to get your overseas sales off the ground, be careful not to take your eye off the ball with your established home customer base. There’s no sense in losing lucrative home market customers through poor service because you’re focusing all your efforts on getting sales in export markets.
About the author: Stuart Allcock is a business consultant and entrepreneur. He’s a Brit who’s made Ireland his home and base for his work. Stuart has a passion for growing businesses and developing international markets. He’s been running export-oriented companies for over 20 years and before that, virtually lived out of a suitcase for many years to care to remember, selling European products and services on a global basis. His company Applied Business Support Ltd helps businesses internationalise their activities, removes barriers to business growth, and works with universities to commercialise their technologies.