Evaluate opportunities and create an export plan:Choosing the right export opportunities
View transcript for Episode 01 - Choosing the right export opportunities recording
First of all, clarify who the customer is, what they want, and are they legitimate? If you’re not sure, the Department for International trade can help.
Once that’s sorted, it’s time to ask questions. And make sure you’re clear on exactly what they want. When that’s in place, there are 4 other areas to work on.
Firstly, consider your capability. Do you have the skills, language and capacity to manage the contract?
Secondly, what about your time and money? Assess the costs and think about cash flow. Particularly for things like paying distributors and potential increases in production. Find out about documentation for your market, in case it takes time to obtain.
Then it’s time to analyse your approach to risk.
You’ll need to consider the socio-economic situation of the market.
What you’ll learn
- the 4 areas to look at when assessing your fit with a potential buyer
- the pressures a large order could place on your business
- the organisations and intermediaries that you may need to work with along the way
Is this opportunity right for your business?
You’ve had an approach by a keen buyer, or you’ve come across a tender for a project that looks ideal for your company. Before you put in the time, effort and money, think about what you need to know.
Don’t get carried away with your own perceptions. Take time to ask questions. There’s no point in presenting your Rolls Royce when what the company really needs is a Mini.
International trade adviser
Service
Clarify who the customer is and what they want
What do you know about the buyer? Is this a real enquiry and is the company legitimate? Be prepared to do your research and due diligence. You may need to use trusted organisations to help you, such as the Department for International Trade, Chambers of Commerce, professional or trade bodies.
Ask questions and check your understanding of what’s required, especially if the detail is vague. The project may turn out to be much smaller or larger than you first thought.
Once you’re clear on what’s required and by whom, you can assess the fit with your company. There are 4 areas you'll need to consider.
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Your capability
Can your company produce what’s required right away, or would your product or service need to be adapted? To deliver a large order, you may need to scale up at speed – do you have the capacity?
You may need extra staff in the UK or in the market, with new skills and training needs such as languages and after-sales service.
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Your time and your money
Think about costs – some are obvious, some not. Can you bear all the upfront costs of increasing your production? If the opportunity is a large one, you may need to visit the market and invest heavily in marketing.
What pressures could this put on your cashflow, especially if there’s a long time between order and delivery? Ask if you might need funding and where you’ll get this from, whether banks or other funding organisations.
If you’re tendering for a project, you may need to work with intermediaries such as contractors or distributors, who also need payment. Have you factored this into your cost and pricing?
Documentation in some markets takes time and money, which might eat into your bottom line. If you’re quoting a price for a project that may take several years, bear in mind payment schedules and the effect exchange rates might have on profits.
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Your approach to risk
Look at the political, economic and social background of the market. Is the economy stable or volatile? Could the political situation suddenly change? Are you ready to accept these sort of risks, or to cover yourself from them?
Be aware that there are UK restrictions on export to certain markets. It may also be very hard to get funding or insurance for exports to higher-risk countries.
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Your appetite for growth
Can this opportunity help you grow? The chance to benefit and profit from just one export order could be great, so don’t dismiss any opportunity out of hand. Weigh up the pros and cons of each potential order carefully, and get others to help you if you need it.
You may find that you can use freight forwarders or export consultants to do some of the more complex work. Search online – there may be grants or funding available for your type of product, company or project.
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