The ABC of profitable exporting

Exporting? That's for global corporations right? Wrong. With a favourable exchange rate and burgeoning recovery in continental Europe, there's every good reason for East Anglian companies to trade overseas. Business editor Paul Hill reports.

There's a simple rule in business: take your goods and services to where the customers are.

But what if those customers are overseas, speak a different language, trade in a different currency, in a country with different regulatory requirements and tax regime?

If an East Anglian business is ready and able to takes its trade to the furthest corners of the British Isles - as many do - how easy is it to start doing business across the Channel or beyond?

Without contacts, without a way in, how do you get started?

So far, only a minority of firms in the East of England export: 8,611 companies across the six counties at the end of 2008.

But the number of exporters is growing - it went up by 3.2pc during 2008, and the value of the region's international exports now tops £20bn.

The majority export their goods and services to other European Union countries. About £12bn of the £20bn total is EU trade, but exports to the Middle East and north African countries is up by 12.6pc this year.

Though the economic climate around the world may still be gloomy, there is every good reason for British firms to think of exporting this year.

The pound-euro, pound-dollar exchange rate is favourable - offering firms in the UK a competitive price advantage over domestic rivals.

Also, while the UK is still in recession, Germany and France - respectively number two and number five in the East Anglian top 10 export destinations - have reported this summer that they have returned to modest growth.

If selling in a downturn is tough, how about selling in a recovering market… with a price advantage behind you?

East of England International (EEI), the publicly-funded advisory body for exporters, not only advises companies on how to get started, but can help identify contacts in target countries or target client industries overseas.

Nick Cairns, of EEI, said: "Why export? This is the key question to ask at the outset. Typically, the answer will probably be to either increase revenues and profitability and-or to improve utilisation of production capacity.

"However, there are other more specific reasons why it makes sense to export. They include: your domestic market may not provide you with the opportunity for growth that your company needs; you may be manufacturing a specialised product and find there are not enough customers in the UK; you may be looking for the increased security your company can achieve by spreading its risks over a variety of markets; you may want to ensure that your product stays competitive by winning and retaining market share over other overseas competitors.

"One major benefit of exporting is that it provides scope to develop your company's strengths and abilities.

"Selling in an international environment will sharpen your innovative edge and open up opportunities that might never come your way if you limit yourself to the home market.

"Of course, for some companies the opportunities to export fall on them by chance; perhaps a chance contact or a reference by a third party or affiliated company. It could also be because a major customer of yours moves into a new overseas market and you follow.

"Another reason to look at overseas markets is if political environments change such as trade barriers are removed or new legislation makes your product or service a necessity.

"Exchange rates could be a driver to start exporting. Currently, the competitive exchange rate of the pound is beneficial for UK exporters."

Next month , Lord Digby Jones, former director general of the CBI and minister of UK Trade & Industry, will be the keynote speaker at a major conference in the East of England about international trade.

The "Global Opportunity" conference Newmarket Racecourse on 19th November, which has been organised by EEI, will focus on how small and medium-sized firms can benefit from exporting.

Lord Jones said: "It has never been more important for all businesses, and in particular smaller firms, to follow an export development strategy.

"Exposing your business to overseas competition makes you more productive, more competitive and more innovative. The domestic gains from exporting overseas are quickly realised.

"Seek guidance, dip your toe in the water of a country where you feel comfortable and be prepared for a long haul."

He added: "More than 85pc of the UK's exports are manufactured goods.

"We are still a massive exporter of cars; about half of every Airbus that flies is made in Britain; we are a major pharmaceutical manufacturer; our food and drink manufacturing is a major export around the world. Defence and security equipment, electrical equipment, medical kit; you name it, if it's at the value-added end of the market and not commodity, and sells on knowledge-application and not just price, if it's innovative and has brand quality, then the UK makes it, sells it around the world and earns Britain her way."

How do companies start exporting?

The first step is to talk to East of England International by calling 08456 419 955. They deliver support from UK Trade & Investment to businesses throughout the six counties of the East of England.

EEI will arrange for an international trade adviser to contact you to discuss the opportunities and how best to start.

Typically, they will help:

Assess a company's readiness to export in terms of your capabilities, resources and commitment;

Evaluate the market opportunities and help identify customers and distribution channels;

Help companies to develop an export strategy and then help you to implement the strategy.

EEI will also help businesses consider some basic questions, including:

Do I have the capacity to export?

What is my unique selling point and does it work in overseas markets?

Is there a market for my product? If there is, what is the size of the market, who are my competitors and how to I access the market?

Am I price competitive?

What are the implications of shipping charges, payment terms and customs duties?

Do I need overseas representation and what form should it take?

What are my liabilities post sale, are there legal constraints, how do I deal in a foreign currency?

Do I have the trained staff; do I understand the cultural implications of selling to overseas customer?

Other export advice, grants and services are available to help businesses get started exporting, including:

Passport to Export - new and inexperienced exporters are offered "free capability assessments", support in visiting potential markets, mentoring from a local international trade adviser, free action plans, customised and subsidised training, and ongoing support once a business has started exporting.

Gateway to Global Growth - helps existing exporters with expert help and strategic advice to review and maximise their international strategy, explore new markets and achieve your international ambitions.

Overseas Market Introduction Service (or OMIS) - helps firms explore new overseas markets with the help of British Embassy commercial staff around the world. Tap into the local knowledge of industry and country experts to help explore the market, establish contacts with potential customers/agents and even host meetings and events at embassies or consulates.

Export Marketing Research Scheme - helps British companies research overseas markets prior to entry. Grants are available for up to 50pc of market research costs.

Export Communications Review - helps review your marketing and other communications to ensure it fits with the intended overseas country taking into account different languages, cultures and regulations.

For further information: Call 08456 419 955 or Visit the East of England International website at www.eei-online.com or www.uktradeinvest.gov.uk

For more information about the Global Opportunities conference, visit www.eei-online.com/globalopportunity or call 08456 419 955.